Goldman Sachs has embraced a new plan to avoid a third straight quarter of disappointing investors on earnings day. Breaking with its own long-standing convention, Goldman executives have been actively downplaying expectations for results that will be disclosed next week. The outcome: Analysts have slashed their estimates for quarterly profit by almost half since mid-June — the biggest revision before an earnings report under CEO David Solomon. That translates into one of the steepest profit drops among peers, and a return on equity that could slip below 5%.

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.

They discuss an analysis by Realtor.com indicating that rent in the 50 largest U.S. cities is now cheaper than it was a year ago, with significant decreases in southern cities that were real estate hotspots during the pandemic.  Median rent prices in these cities dropped by 0.5% in the last year.

Chris and Saied look at a report stating that former Celsius CEO Alex Mashinsky was arrested Thursday, as federal regulators announced his bankrupt crypto exchange Celsius would pay a $4.7 billion fine.

They also offer some thoughts on the consumer price index (CPI) which has increased 3% from a year ago, the lowest level since March 2021. On a monthly basis, the index, which measures a broad swath of prices for goods and services, rose 0.2%.

Join Chris and Saied for this fascinating and informative conversation.

Enjoy!

What You’ll Learn in this Show:

• Why one month of data is not enough for a 'wait and see' approach to the economy.
• Why core inflation is a better metric, and why food and energy data is too volatile.
• Goldman Sachs new tactic of downplaying its earnings.
• And so much more...

Resources:

"US Inflation Hits Two-Year Low, Giving Hope for End to Fed Hikes" (Bloomberg)

"Goldman breaks its own rule to flag results much worse than rivals" (Bloomberg Business via Instagram)

"These are the US cities where the rent has fallen the most since last year" (CNBC via Instagram)

"Former Celsius CEO arrested, company agrees to pay $4.7 billion settlement" (CNBC via Instagram)

"Inflation rose just 0.2% in June, less than expected as consumers get a break from price increases" (Chart of the Day via Instagram)

"Inflation Eased to 3% in June, Slowest Pace in More Than Two Years" (The Wall Street Journal)

"Inflation rose just 0.2% in June, less than expected as consumers get a break from price increases" (CNBC)