« Exchanges at Goldman Sachs

Markets Update: February 7, 2020

2020-02-07

Sarah Kiernan of Goldman Sachs' Global Markets Division gives her quick take on the five numbers she's watching in markets.

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Welcome to our exchanges at Goldman Sachs market Update for February seven every week we I'm with leaders across the firm to get their quick, take on five numbers there watching in the markets today were joined by Sarah Kernel of global markets. Division to welcome. Thank you for having been so. What's your focus here, Goldman in who your main clients sime, cheap operating officer of our commodities, business here Coleman, and so the commodities business is interesting because we deal with investors across the spectrum, but we also have a very heavy client base of corporate clients so thoroughly the big number you ve been looking at fourteen dollars, which is the amount that the price of Brent crude oil has fallen since we all started talking about the corona virus in MID January, that represents fifteen percent drop in the price of brand, as opposed to equities and credit, both roughly and change, and makes them that oral is fallen more than those asset classes as a global commodity, where the demand impact is going to be a direct input to the price and not have to be filtered through the
actual earnings impact or a macro policy response down the road. The questions and messrs our focus on are twofold: how demand is being destroyed and how long will it be destroyed? Four, and neither ones easy to answer so given Huge range of outcomes in the uncertainty investors are really stand on the sidelines and waiting should no more the virus is scale and scope of organic back into the market. So what's a number that you feel has been getting a lot of attention but doesn't really tell us all we need to know the zero, which is the fracturing that progressive candidates and say that they would allow in the United States if their elected and twenty twenty. That's our getting a lot of attention back in September when Elizabeth Warren said that she would ban all racking in the U S on her first day as president and the starting getting attention again now that Bernie Sanders has been rising in the polls. really tell us what we need to know about the natural gas market going forward, given that it's not necessarily that feasible to actually be enacted, even if a progressive candidate word when it stiff
what to see how president can unilaterally ban in technology that so pervasive and so important, a huge part of our economy will be very politically difficult, probably be challenged in court and would actually also have very counterproductive measure of making coal feasible again on a price basis, but they could I we do as likely around banning cracking on federal lines or just not allowing for leases on new development so that ten percent of the total. U S natural gas production, so the price. That will depend on how that was actually implemented, but it would probably lead to a more moderate price rise in the back of the curve, which could probably be met with production elsewhere in the United States, so habit a number that move the law or maybe has moved in all that caught your eye. Twenty eight billion Where's the total amount of physical gold buying done by central banks and twenty nineteen does the big increase from thirteen billion and twenty seventeen and a complete reversal from the ninety nine. These are central. Banks were net sellers of gold. Giving this is
the DE dollars asian process globally. As many of these central banks leading this are countries that have had geopolitical issues of the United States are three of the top or being Turkey, Russia and China. There's also interest from private wealth clients and physical gold, given as a potential hedge against well, taxes and interest from investors is diversification with equity is at high levels, so the structure I'll bet that's been brought into the market over the last few years has brought all the prices that we haven't seen since twenty thirteen and longer term, we think, should provide support to the market, so Crypto has killed gold, yet a hedge. What number you think about for the future, trillion dollars, which is the dollar amount expected to be invested in. creating new renewable power generation assets in the next thirty years. So that'll total, wind and solar production from ten percent of global generation today to fifty percent in the future this week. informative for the power market, significantly lowering the marginal costs of production, but it could all
led to more volatility. When the sun is shining or the windows and blowing cause, you don't have a dial just turn up production when you need it that you have with fossil fuels right now and then away from power generation with the rise of Evie. That will be interesting because so far the power generation has displace coal, but as easy its bigger and bigger. That will displace oil. That will be one of biggest impacts from renewables, going forward thinking about when you're number in the office about when you're, not in the office. Nineteen seventeen, which is one of the movies that is professed this we can with the Oscars and very interesting film, with shot still look like one continuous shot and really puts you in the perspective of a soldier. what our one so going to see. How that does? One of these days are get to see it, but not you Thank you. So much for joining us are thank you That's all for this week's market update on exchanges, the Goldman Sachs thanks for listening and be sure to check out our other episode this week on the european financing market, with Dennis Coleman of governments, investment begging, division thanks and have
We can all price references and market forecasts correspond to the date of this recording. This podcast should not be copied distributed, published or reproduced in whole or in part. The information contained in this package does not constitute research recommendation from any Goldman Sachs Entity to the listener. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements or any information contained in this podcast and any law,
ability, therefore, including in respect of direct indirect or consequential loss or damage, is expressly disclaimed. The views expressed in this pod cast or not necessarily those of Goldman Sachs and Goldman Sachs, is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs too. That listener, nor to constitute such person a client of any Goldman Sachs Entity.
Transcript generated on 2021-09-17.