Shares of Goldman Sachs are under a ton of selling pressure today after the company reported weaker than expected earnings. With a decline of nearly 5% on the day, the stock is on pace for its second worst earnings reaction day since at least 2001. What makes today’s decline even more noteworthy is the fact that the stock has now given up half of its gains since Election Day. As shown in the chart below, from Election Day through its intraday high on 3/1, shares of Goldman rallied 74 points. Since then, the stock has now declined roughly 37 points through this morning’s low.
Following today’s decline, shares of Goldman are also sitting at a critical support level which coincides with the level they opened up at on 11/30 when Treasury Secretary Steve Mnuchin was officially nominated and made comments that Dodd-Frank is ‘too complicated’ and that he also planned to take a closer look at the Volcker Rule. A lot of the rally in the Financial sector was predicated on less in the way of regulatory burdens and to a lesser degree tax reform. With Goldman now giving up half of its post-election gains, the case can be made that much of the optimism over less regulation has been erased.
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