Goldman CEO Warns of Higher Costs, Softness in Fixed Income

(Bloomberg) -- Goldman Sachs Group Inc. Chief Executive Officer David Solomon cautioned that the bank's fixed-income trading business is softer than in past quarters and that expenses are running higher across the firm.

Fixed income has been softer during the third quarter than equity trading, which has remained "very strong," Solomon said Wednesday at a Barclays Plc conference. Costs are expected to be higher given how busy the bank has been with client activity in the period, he said, and Goldman has accelerated some technology investments as well.

Goldman shares fell as much as 1.6% after Solomon's comments.

Wall Street banks have been enjoying a banner year for trading as volatile markets keep clients busy. But some of the biggest firms have started to diverge on how they're expecting the third quarter to shape up.

On Tuesday, JPMorgan Chase & Co. Co-President Doug Petno said that trading revenue for the three months through September is poised to climb by a percentage in the mid-to-high teens. On Monday, Bank of America Corp.'s Brian Moynihan warned that trading revenue at his bank is likely to be "relatively flat" given a drop in fixed-income trading, comments that sent some bank shares down.