The economy continues to slow. While that’s starting to show up in declining year-over-year inflation rates, the market is warning about a recession in several ways.
Big businesses are one of the places where the alarm has been sounded. That’s because a few companies have announced layoffs, of anywhere from 5 to 30 percent of their workforces. Typically, a company that can do more with less can fare well over time, however.
One of the most recent companies to announce layoffs is Goldman Sachs (GS). The investment bank sees its staff dropping by 8 percent in 2023, although it may not be as much depending on market conditions. Nevertheless, that could be several thousand high-paying finance jobs on the block.
Financial companies have been hit by a slowdown in stock trading, as well as the drying up of mergers and acquisitions, and initial public offerings. Goldman has held up well, much as it ended up thriving after the financial crisis in 2008.
Action to take: Shares are still considerably off their lows from last June, and shares go for 8 times forward earnings. This industry leader looks like a reasonable stock to buy, particularly on any big down day for financial stocks. At present, shares yield 2.8 percent as well.
For traders, the stock has generally been trending higher over the past few months, despite some weakness in the past few weeks. The March $380 calls, last going for about $7.90, offer mid-double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.