Market Insider

Goldman Sachs hits 8-year high as bank-friendly Trump administration appears to take shape

Trump team's deregulation: Time to buy banks?

Goldman Sachs shares hit an eight-year high and finished with their best month since January 2012 on Wednesday, as a more bank-friendly Donald Trump administration continued to take shape.

The stock finished the day up 3.6 percent, closing at $219.29. Deutsche Bank upgraded Goldman to buy from hold, saying it seems well-positioned for a stronger macro environment given "revenue upside, good cost control and a valuation below peers."

In its note Wednesday, Deutsche said it is assuming much stronger GDP growth and at least some deregulation, in addition to "more global divergence in interest rates and a general increase in risk-taking appetite among investors and companies."

Trump, who has signaled he will relax regulations on the financial sector, picked Goldman veteran Steven Mnuchin and distressed debt investor Wilbur Ross to lead his Treasury and Commerce departments, respectively.

Earlier Wednesday on CNBC's "Squawk Box," Mnuchin said he believes the U.S. economy can grow at a sustained rate of 3 to 4 percent. He and Ross advocated for tax cuts to help stimulate growth.

Trump previously appointed former Goldman investment banker Steve Bannon as White House chief strategist. The president-elect also met with current Goldman President and COO Gary Cohn on Wednesday amid reports that he was considering leaving the firm. Trump was reportedly considering Cohn for director of the Office of Management and Budget.

Separately, Deutsche said Goldman's recent rollout of a consumer lending platform will help increase revenue after 2018, adding $400 million in credit revenues in 2019.

Shares of Goldman are up 23 percent month to date, and have risen 37 percent in the past six months.