Superday Prep: GS FICC and Equities

What to do if someone takes credit for my work

If I found that someone was taking credit for my work, I would first assess the situation to understand whether it was intentional or a misunderstanding. If it seems like an unintentional oversight or miscommunication, I would approach the individual privately and calmly express my perspective, explaining how my contributions were part of the final result. I'd keep the conversation respectful and focus on clarifying the facts to ensure that future credit is given where it's due.

However, if it were a more deliberate attempt to claim my work, I would address the issue with the person in a professional manner, again privately, to express my concerns and seek a resolution. It's important for me to maintain a positive working relationship, so I'd aim to resolve it without escalating conflict. If the situation persisted or affected my professional reputation, I would consider discussing it with a supervisor or manager to ensure fairness and transparency moving forward."

Effects of Trump's seep on Equities

Positive for pro-business sectors: Trump has a pro business stance with plans to reduce corporate tax rates and encourage deregulation. Would most likely boost corporate profits especially in energy, defense and infrastructure sectors

Increased Volatility from Trade Tensions. Trump's trade policies include higher tariffs which could create volatility in industrials and tech stocks.

Additional impact on market sentiment as the stock market could rally on tax cuts and deregulations. However, concerns could grow concerning the impact of trade wars (especially with China) and higher tariffs

Effect of Trump's sweep on Bonds / Fixed Income

We can expect rising yields due to higher government borrowing to fund Trump's fiscal policies on tax cuts and defence spending which would increase the supply of US government debt

We might also observe yield curve steepening where longer duration bond yields might rise more than short term rates. This could be furthered by inflation and fiscal deficits

Trump's sweep effect on currencies

We might observe short term dollar strength as markets anticipate a pro growth fiscal environment, higher interest rates and global tensions thus pushing investors towards what I'd call safe haven assets like the US dollar

There could also be an impact on tariffs especially those targeting China and other trade partners. This could initially strengthen the dollar but may cause longer term dollar volatility if trade tensions escalate

Trump's win and effect on commodities

Trump's focus on energy independence and deregulation could boost domestic energy production which could push prices higher

Tariffs on trade related commodities like steel could raise costs, particularly for industries dependent on imports

Gold could see increased demand in times of market volatility caused by trade wars and act as a hedge against potential inflation fears

Main features of UK budget announced by Chancellor Rachel Reeves

£40bn tax increase

£28bn annual borrowing

£70 bn spending boost for 2026-27

Effect of UK budget announcement on Bons

The autumn budget has triggered a rise in government borrowing costs, with 10 yr and 30 yr Gilt yields reaching respective one year highs at 4.44% and 4.68%.

The UK 10yr yield has been rising from its mid-september low to around 4.25% ahead of the autumn budget but since the announcement has rallied to levels last seen in November 2023

Assurances about fiscal responsibility could ease pressures surrounding the spike in yields

What Gilt yields rose after the autumn budget announcement?

10 yr and 30 yr Gilt yields

What was the 10yr Gilt yield high?

4.44%

What was the 30 yr Gilt yield

4.68%

What observations were made about the spike in the 10yr gilt yield?

It had been rising since its mid september low to around 4.25% ahead of the autumn budget. However since the autumn budget announcements, it has reached levels last seen in November 2023

Effects of autumn budget on currency (UK)

British pound sterling showed resilience in this period. It did see some intraday volatility around the autumn budget but has remained within a near 100 pip range versus the US dollar.

Whilst there was some depreciation in the pound sterling, it was not as severe as the reaction following the 2022 'mini-budget'.

Effect of autumn budget on equities (FTSE 100, FTSE 250 and FTSE AIM All Shares)

The UK budget announcement led to mixed reactions across the UK stock markets

FTSE 250: Mid sized companies saw a positive response, rising around 0.5% as tax changes weren't as severe as expected

FTSE AIM All Share: The small - cap index surged by4%, as the fiscal policies offered clarity and stability

FTSE 100: The largest companies in the FTSE 100 did not react as positively. The index saw an initial drop of 2.5% reflecting concerns over how the budget might affect larger firms with global exposure

Which parts of the UK stock market saw a positive reaction after the budget announcement?

FTSE 250 (rise of 0.5%) - smaller companies

FTSE AIM All Share (4% surge) - high growth smaller companies

What part of the UK stock market saw a negative reaction after the budget announcement?

FTSE 100 - larger companies with global exposure (initial drop of 2.5%)

What stock / company would you invest in?

Stock Pitch: Centamin PLC (CEY.L)

What is Centamin PLC and why is it a good investment?

Centamin is a gold mining company with a strong asset base, primarily the Sukari Gold Mine in Egypt, one of the world's largest open-pit gold mines. With a market cap of £1.7 billion and a solid 5-year return of 11%, Centamin offers growth potential linked to rising gold prices, making it attractive for both long-term investors and short-term traders.

What are the key drivers behind investing in Centamin PLC?

Gold Prices: Centamin's revenue is directly tied to gold prices, which tend to rise during economic uncertainty.

Sukari Mine Production: The mine is Centamin's key asset, contributing most of its revenue through gold production.

What opportunities does Centamin PLC present?

Gold Price Growth: A rising gold price could significantly boost Centamin's profitability.

Expansion: Increased production and exploration efforts could provide long-term growth.

How does Centamin PLC provide a competitive advantage

Low-Cost Operations: Centamin benefits from relatively low mining costs, giving it strong leverage to rising gold prices.

Geographical Diversification: With operations in Egypt, Burkina Faso, and Australia, it reduces geopolitical risks.

Overall conclusion for investing in Centamin PLC?

Centamin is well-positioned for growth with low-cost production and strong exposure to gold prices. Its stock offers both trading opportunities from gold price movements and long-term investment potential driven by production growth and exploration.

Examples of services GS provides in FICC and Equities

Equities:

Prime Services

Cash Equities and Execution Services

Derivatives

FICC

Commodities

Global Credit

Global Currencies and Emerging Markets

Interest Rate Products

Mortgages and Structured Products

Repo

Digital Platform

Marquee

Systematic Trading Strategies

What is Marquee?

Marquee is the digital platform for institutional and corporate clients of Goldman Sachs. The platform aims to provide cutting-edge technological tools that empower our clients to successfully navigate global markets.

What is a long position or going long?

Buying an asset with the expectation that its price will rise with a potential end goal of selling high

What is a short position or going short?

Selling an asset you don't actually own, borrowing it with the intention of buying it back later at a lower price. Essentially profiting from a decrease in asset price

Why is shorting more risky?

When going long, maximum loss is limited to amount invested (if the asset drops to zero).

With shorting, potential losses are theoretically unlimited since an asset's price can rise indefinitely

How do traders amplify gains on long and short positions?

Use leverage by borrowing funds to increase their purchasing power. This allows them to control a larger position with a relatively small amount of their own capital.