Golman Sachs 3Q15 Earnings Call Notes

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China and monetary policy came into focus

“Both the Chinese economy and the country’s monetary policy came into focus. Our clients evaluated the potential implications of a slowing Chinese economy, the decision by the People’s Bank of China to devalue its currency, and the resulting volatility in global markets. As it relates to the U.S. economy, our clients remain focused on the Federal Reserve’s interest rate policy.”

3Q served as a reminder of the fragility of markets

“The third quarter served as a reminder of the fragility and sensitivity of markets, investor sentiment, and the path to strong global economic growth.”

Even though we’re in a deep cyclical down cycle in the fixed income markets, clients still need trading services

“your thesis is our thesis, which is we’re in a deep and somewhat long cyclical part of the fixed cycle. But when you think of the forward, our construction simplified is twofold. Our level engagement with our clients tells us clients still need the services.”

People said that M&A wouldn’t come back in 09 and 10 either

“M&A, the services weren’t active in 2009 and 2010, people questioned whether or not M&A would come back. But our dialogue told us that client engagement and the services we provided to the liquidity provider were important.”

The whole world is adjusting to lower commodity prices in the intermediate term

“I think the whole world is adjusting to basically a longer-term consideration of commodity prices being lower in the intermediate term. And ultimately, that will be a catalyst for activity, as clients considered hedging strategies, as they think about financing alternatives, as clients and companies struggle for refinancing.”

The M&A Pipeline is good

“the pipeline is good. And as I said it was up at the end of the third quarter and then really the most significant information component for us is the level of dialogue that board’s CEOs are having and the dialogue feels quite good. I think it’s always natural for folks to question when the market has been robust, whether there is information content in the actual activity level as peaking and maybe that’s a factor.”