Goldman (GS) Fires 20 for Cheating

Markets were up in higher than average volume trading today, with every indice making at least some small gains. The Dow added 74.22 points to close out the trading day at 17,215.97. The NASDAQ was also up, posting a 16.59 point gain to close the day at 4,886.69. The S&P 500 led today in real gains, with a bump of 9.25 points to close out at 2,033.11.

Goldman (GS) Fires 20 for Cheating

20 employees of Goldman Sachs (GS) are out the door, following new revelations that they were cheating on internal corporate tests.
The tests are designed to ferret out analysts who aren’t thinking in line with the company vision, and test the quality of analysis and investments that they provide. Cheating on the tests is obviously a fireable offense, but is it a big deal?

Most investment firms use these internal tests as something like quality control for their analysts and investors. So, while it’s not as bad as gaming the market or insider trading, the fact that the employees got caught cheating is a big deal to Goldman senior management. According to Goldman spokesman Sebastian Howell, "This conduct was not just a clear violation of the rules, but completely inconsistent with the values we foster at the firm.”

As of right now there is no firm word on where these 20 employees were working, but the earliest reports indicate that it was a mix of New York and London staffers that were let go.

Quanta Services (PWR) Down 30%

After Quanta (PWR) released information that it would be missing guidance by as much as half, share prices of the power company plummeted today. Their current guidance predicted profits of between $0.38 and $0.40 per share, but the company will be lucky to hit $0.17 according to insider reports. Shares of Quanta fell nearly 30% in trading today, and ended the day at $18.73.

Utilities and Consumer Non-Durables are Driving Growth

Markets have shifted pace lately, and one of the reasons is the lack of growth from the pharmaceuticals industry. Biotech imploded, and that left the market picking up the pieces. Since then, the Utilities and Consumer non-Durables sectors have become the market leaders, each one growing over a point above average.

That’s big news, because it marks a shift away from growth that comes from within corporations -- like R&D, and new products -- to growth that comes from the consumer economy. People are paying their bills on time and buying new products, and that’s a big change from this time last year. Although the consumer spending numbers are still soft -- and job growth is softer still -- the fact that we’ve moved into a new consumer-driven market for the fall is good news for retailers.
Published on Oct 16, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2016. Content published with author's permission.

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