Big Day Tuesday: Goldman Earnings

Will Tuesday be a monumental day in the stock market, after Goldman Sachs reports earnings?

That question might sound a little over the top, but nearly everyone wants to hear what Goldman has to say.

If the bank reports a loss, as is widely expected, it will be their first ever as a public company. Although the news won’t be shocking, it could be interpreted as the end of an era.

End Of An Era

“A loss for Goldman…would punctuate a year of grim news for the financial industry… and underscore how even the mightiest in the industry have fallen” writes The New York Times .

Until quite recently, Goldman had been considered a best of breed stock, almost above the fray. If you watch Fast Money regularly you know Guy Adami is a former Goldman guy. Of course, that creates bias, but also unique insights. Adami always said that Goldman just did things a little better.

But an “X” factor isn’t enough in this environment. Even a golden child can’t escape the realities of the plunging oil and real estate markets.

In his blog, Fast Money Sr. Producer John Melloy sums it up best. Goldman earnings, he says, “are 2008’s last gasp.”

What To Expect?

Sandler O’Neil analyst Jeffery Harte was Fast Money’s guest on Monday. He slashed his 4th qtr. estimate on Goldman to a worse-than-consensus $3.78 a share loss.

The widely-followed analyst cited greater-then-expected asset writedowns and flat-line investment banking activity levels, not to mention the collapse in global equities.

Although that sounds bearish, you might be surprised to hear that Harte tells Fast Money he has a “Buy” on the stock.

“Although we’re in a tough spot in the cycle, I would not go so far as to say Goldman is in trouble.”

Harte thinks when the market turns so will Goldman’s fortunes. “Goldman Sachs will continue to generate revenues as they always have. Investment banking and underwriting M&A will still be there.”

What’s the Bottom Line? To say Goldman is no longer a viable entity I think is the wrong thing, concludes Harte. Looking out a year or 18 months I think you’ll be very happy owning Goldman Sachs, I’m just not sure 1 month from now.

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Trader disclosure: On Dec. 15th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT), (SDS), (MCD); Najarian Owns (FCX), (RDC); Najarian Owns (BMY) Calls; Najarian Owns (NUE) And Is Short (NUE) Calls; Najarian Owns (UYG) And Is Short (UYG) Calls; Finerman's Firm Owns (AET), (DSX), (MSFT), (DVN), (APC); Finerman's Firm Is Short (VNO), (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (USO); Seygem Asset Management Owns (FXI); Seymour Owns (AAPL), (BAC), (F), (MER), (TSL), (CCJ); Seymour Owns Shares Of Uranium One, Inc.

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Jeffrey Harte is senior analyst with Sandler O'Neill
Sandler O'Neill Advised Clients In Deals Involving (BAC) And (JPM)
Sandler O'Neill Recvd. Inv. Bank. Comp. From (BAC), (C) In Past 12 Mos.
Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (JPM), (C) In Next 3 Mos.
(BAC), (C), (JPM), (MER), (MS) Are Clients Of Sandler O'Neill
Sandler O'Neill Was A Manager Or Co-Manager Of A Public Offering for (C) In Past 12 Mos.
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (MER), (BAC)
(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill with wires