Goldman traders are on pace for a record year. A close-up look at how they're doing it

In a new interview with CNBC, a Goldman exec breaks down what's driving stocks, where markets are headed, and how the bank’s equities desk fuels its growth.

Goldman Sachs' equities trading desk is on pace for a record year, driven by a 14% increase in trading revenues in the last quarter. This growth is attributed to the team's ability to capitalize on market volatility, with the bank's traders generating $4.4 billion in revenue. The bank's equities desk is led by Goldman's global head of equities, Marc Nachmann, who has been instrumental in driving the desk's growth. Nachmann has stated that the team's focus on providing high-quality services to clients has been key to their success.

The success of Goldman's equities trading desk has a direct impact on the fees that retail investors pay when buying and selling stocks. As one of the largest players in the market, Goldman's trading activities can influence the prices of securities, which in turn affects the costs borne by individual investors. For example, the average retail investor may pay a commission of $10-20 per trade, which can add up quickly for frequent traders. This can eat into investment returns, making it more challenging for individuals to achieve their financial goals.

Goldman's strong performance in equities trading is part of a broader trend of Wall Street banks benefiting from market volatility. Historically, periods of high market volatility have been lucrative for investment banks, as they can capitalize on the increased trading activity. Insiders know that the current market environment, characterized by rising interest rates and geopolitical uncertainty, is likely to continue driving trading volumes and revenues for the foreseeable future. This has led to a resurgence in the fortunes of traditional investment banks like Goldman.

Investors should watch for Goldman's upcoming quarterly earnings report, scheduled for release on January 15. The report is expected to provide further insight into the performance of the bank's equities trading desk and the outlook for the remainder of the year. Notably, Goldman's traders are reportedly using advanced data analytics and artificial intelligence tools to inform their trading decisions, a fact that may surprise some given the traditional reputation of the investment banking industry as being slow to adopt new technologies.