What’s Going On Here?Goldman Sachs had Reddit traders to thank for its best-ever quarterly results on Wednesday, so it mightn’t be long before the investment bank is posting its earnings entirely in gif. What Does This Mean?Goldman’s earnings didn’t just blow past expectations: they rocketed almost 500% versus a year earlier. That was down to a couple of things. First, the bank’s trading business, which had its best quarter in over a decade as Redditors pushed the sheer number of market trades to record highs. And second, the bank’s underwriting business, which makes money by helping companies “go public” through initial public offerings – a market that was red hot among tech firms and special-purpose acquisition companies (SPACs) last quarter. That segment saw its revenue quadruple from the same time the year before – hitting its own record high. Why Should I Care?For markets: Big banks are starting to feel more relaxed.
Both JPMorgan and Wells Fargo reported expectation-beating results on Wednesday too, and they had a little something extra working in their favor. Both firms’ earnings took a knock last year when they set aside cash in case pandemic-hit borrowers couldn’t repay their loans, but now that the US economy is starting to rebound, they felt confident enough to reverse some of those provisions last quarter. That added a tidy $1 billion and $5 billion to Wells Fargo’s and JPMorgan’s quarterly earnings respectively.
Zooming in: Goldman’s following the money.
Of the six biggest US banks, Goldman makes the biggest share of revenue from investment banking activities like trading and underwriting. That came in handy last quarter, sure, but it’s actually been holding the company back. Firms with big retail banking businesses, after all, have benefited from access to cheap money through customer deposits for the last decade – money they could then lend or invest to generate juicy profits. No wonder, then, that Goldman's working so hard to expand its own recently launched retail banking business. | 
