What happened

Goldman Sachs Group (GS 0.14%) had a good November, jumping 12.1%, according to S&P Global Market Intelligence. The stock is down only about 5% year to date as of Dec. 7.

The financial services giant beat the major indexes in November, as the Dow Jones Industrial Average rose 5.7%, the S&P 500 was up 5.4%, and the Nasdaq Composite gained 4.4% last month.

So what

A few catalysts drove the company's November surge, with the primary driver being good macroeconomic news that floated most banks and financial firms.

The most newsworthy item related to Goldman Sachs was an announcement on Nov. 3 that it had launched a service called Datonomy, a classification system for digital assets.

The service, launched with MSCI (MSCI 1.69%) and Coin Metrics, will classify coins and tokens based on how they are used, helping investors navigate and understand the expanding universe of digital assets. Among other things, Datonomy will allow market participants to track trends across different industries, such as smart contract platforms and decentralized finance, and screen digital assets using various filters. The stock price got a boost after the announcement.

But the biggest catalyst this past month was good news on the inflation front. The consumer price index (CPI) increased 7.7% year over year in October, dropping from 8.2% the previous month and beating expectations. It was a sign that the Fed's tightening has finally started to have an effect and signaled that it might ease up on rate hikes.

That was acknowledged by Fed chair Jerome Powell on Nov. 30, during a speech in which he indicated the Fed might moderate the pace of rate hikes, potentially in December. These two developments jolted the markets on the hopes that inflation may have peaked.

Now what

While there were some hopeful signs in November, the reality is that the markets remain very uncertain, and many economists are predicting an economic downturn or mild recession in early 2023.

Just this week, Goldman Sachs made crypto-related news again when several news outlets reported that it was interested in acquiring or investing in crypto companies following the collapse of FTX and the tanking of the entire market. The crash has brought down valuations for many crypto companies, and Goldman Sachs believes there is an opportunity, and need, for regulated, stable big banks in the space, reported Reuters.

Goldman Sachs has fared pretty well through the downturn, down only 5% year to date. Its diversified mix of revenue streams have helped it navigate, and the stock is undervalued with a price-to-earnings ratio of 9.5. It remains a good, solid buy.