Goldman’s Secret Division and 3 Hot Stocks in the Spotlight
The Goldman Sachs Group, Inc. (NYSE:GS): Current price $132.96
The Volcker rule of the 2010 Dodd-Frank act was supposed to curb risky proprietary trading behavior by big banks, and everyone had reason to believe that Goldman CEO Lloyd Blankfein was playing nice. After all, Blankfein told more than 400 people at an Economic Club lunch in Washington, D.C. that Goldman no longer had any traders who engaged in the behavior.
But according to a Bloomberg report, the bank has skirted regulation and maintains a “secretive” group called Multi-Strategy Investing that bets with as much as $1 billion of the firm’s own money. Insiders report that the division operates very much like a hedge fund.
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Merck & Co. Inc. (NYSE:MRK): Current price $42.43
Shares of this healthcare company traded fractionally higher on Tuesday morning after its CEO, Kenneth Frazier, indicated that Bausch & Lomb, an eye-car company, could be an acquisition target. The eye-care company would cost at least $10 billion, but would bolster a consumer health unit at Merck that is still small relative to other divisions.
American International Group (NYSE:AIG): Current price $35.39
Shares of AIG were off as much as 1.6 percent following news that its board will meet on Wednesday to consider joining a $25 billion lawsuit filed by former CEO Maurice Greenberg against the U.S. government. Greenberg alleges that the government constructed an illegal and inequitable bailout during the financial crisis, and cost shareholders billions. The government paid $182 billion for about 80 percent of the company in order to prevent it from falling into bankruptcy, and has since made $22 billion in profit from the sale of its stake.
Alcoa Inc. (NYSE:AA) — Current price: $9.14
Investors seem unsure what to do with shares of this global aluminum producer ahead of its scheduled post-market fourth-quarter earnings release. Analysts are expecting net income of about $0.07 per share, which would be a substantial improvement from a net loss of $0.03 per share in the year-earlier quarter. (See our Alcoa earnings sneak peak.)