Goldman Sachs CEO David Solomon holds positive outlook for 2024

Goldman Sachs (NYSE:GS) CEO David Solomon called 2023 "a year of execution" for the investment bank and expressed optimism about this year as it expects to benefit from an upturn in capital-markets activity, according to his annual letter to shareholders, released on Friday.

“We took swift, decisive action to refocus the firm’s strategy while at the same time strengthening our core businesses, and I’m proud of the progress we made,” Solomon said. “We put the firm in a stronger position for 2024 and beyond.”

The company's focus will be on its two core businesses -- global banking & markets and asset & wealth management -- he said. Like its peers, Goldman (GS) last year encountered congested capital markets, amid low activity in capital raising and M&A, that constrained fees and amplified losses on real estate investments. What's more, its faltering consumer strategy, which it has since retreated from, added to its challenges.

In the letter, Solomon noted that market are adjusting to the elevated cost of capital stemming from the Federal Reserve's tightening cycle.

On the economy, he contended that inflation could be stickier than markets expect. "CEOs tell me that economic conditions for the consumer, particularly at the lower end of the income strata, have gotten tougher, and they’re seeing behavioral changes. But the Fed now has room to ease if economic conditions start to decline," Solomon said.