Trading Business In Focus As Goldman Reports Q2

CHONGQING, CHINA – JULY 13: In this photo illustration, a smartphone displaying the logo of The … More Goldman Sachs Group, Inc. (NYSE: GS), a leading American multinational investment bank and financial services company, is held in front of a screen showing the company’s latest stock market chart on July 13, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)

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Goldman Sachs (NYSE:GS) is set to announce its Q2 2025 earnings on Wednesday, July 16, 2025. Consensus forecasts indicate that revenue is expected to rise by approximately 6% to $13.5 billion, while earnings are anticipated to be about $9.68 per share, reflecting an 11% increase compared to the previous year. While the overall economic forecast remains ambiguous due to persistent worries regarding tariffs affecting major trading partners—which may incite inflation and hinder growth—Goldman is projected to gain from robust performance in its trading division. Additionally, Goldman’s asset and wealth management sector is likely to perform well, given the market’s strength during Q2. The bank managed a record $3.17 trillion in assets in Q1, and this figure is expected to have increased further in Q2, supported by an approximate 10% rise in the S&P 500 index during the quarter. However, investment banking revenues at the bank are expected to stay under strain, as geopolitical tensions and tariff-induced uncertainties continue to impact mergers, acquisitions, and IPO activities.

The company possesses a current market capitalization of $223 billion. Revenue over the past twelve months reached $54 billion, with net income recorded at $15 billion. Therefore, if you are looking for potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns over 91% since its inception.

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Goldman Sachs’ Historical Chances of Positive Post-Earnings Return

A few insights into one-day (1D) post-earnings returns:

• Over the last five years, there have been 20 earnings data points recorded, with 12 positive and 8 negative one-day (1D) returns observed. In summary, positive 1D returns were noted approximately 60% of the time.
• Interestingly, this percentage rises to 67% when analyzing data from the last 3 years rather than 5.
• The median of the 12 positive returns is 2.3%, while the median of the 8 negative returns is -1.6%

Further data regarding the observed 5-Day (5D) and 21-Day (21D) returns post-earnings, along with the associated statistics, are summarized in the table below.

GS 1D, 5D, and 21D Post Earnings Return

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Correlation Between 1D, 5D, and 21D Historical Returns

A relatively lower-risk strategy (although not efficient if the correlation is weak) involves examining the correlation between short-term and medium-term returns following earnings, identifying the pair with the highest correlation, and executing the suitable trade. For instance, if the correlation between 1D and 5D is the strongest, a trader could take a “long” position for the following 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from 5-year and 3-year (more recent) history. Please note that the correlation between 1D and 5D refers to the relationship between 1D post-earnings returns and the subsequent 5D returns.

GS Correlation Between 1D, 5D, and 21D Historical Returns

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Discover more about the Trefis RV strategy, which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), delivering strong returns for investors. Additionally, if you’re seeking potential gains with a smoother experience than an individual stock like Goldman Sachs, consider the High Quality portfolio, which has surpassed the S&P and recorded returns exceeding 91% since its inception.

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