Analysts from different camps seem to be in agreement about Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) concerning earnings in the first quarter, and that is that they aren’t going to be that good for either company.
Most of this is the result of concerns by clients of the two companies over the Greek sovereign debt crisis, which caused them to hold back on spending money and making big decisions on major changes.
There are a number of weak areas as a consequence of these concerns at the many clients and companies served by Morgan Stanley and Goldman, and they include declining IPOs, activity in the equity markets and mergers and acquisitions.
It wouldn’t do much good to include the numbers the analysts gave in their revised outlooks, as they were all different, with some of them downgrading their outlooks in relationship to the consensus of the street.
I didn’t find any that didn’t drop their outlook by at least 25 percent for each company, although there could be some out there that dropped them by less, I just couldn’t find any.
Either way, the point is business really dropped in the first quarter for the two financial institutions, and it underscore how far we have to go before a real, sustainable recovery emerges, and the strong risks still out there that can crush the earnings of a company based on worries and fears.
Companies and institutions are still in a defensive mode as these observations reveal, and just a mention of potential high risk sends them back to holding their money and waiting it out to see which way the economic winds blow.
It seems we’re going to go through that for several years before the wariness leaves executives and they begin to see a more steady marketplace.
