Goldman Sachs (GS  ) posted Q3 results that easily topped analysts' expectations with the major driver being better than expected results from bond trading and asset management. This continues a trend from the same quarter and of recent bank earnings. It's also clear from anyone witnessing the froth and ebullience on Wall Street, while the real economy is not doing well.

The economic recovery is "K-shaped" which means that some are doing better than ever, while others, who are in industries, more connected to the virus' impact continue to struggle. This is also evident from the results of Wall Street-oriented banks like Goldman Sachs or Morgan Stanley (MS  ) compared to regional banks who are dealing with a flat yield curve, decreased demand for loans, and the potential for a spike in defaults.

Inside the Numbers

In Q3, Goldman had a record $9.68 in earnings per share, exceeding the $5.57 EPS analysts' estimate. Revenue increased by 30% to $10.78 billion, while analysts were looking for $9.8 billion.

The bulk of revenue growth came from the trading division which accounted for $4.6 billion in revenue a 29% increase from 2019's Q3. Within trading, bond trading surprised the most at $2.5 billion which was 20% more than expectations of $2 billion.

Asset management was another strong performer with $2.8 billion in revenue which was a 71% gain from last year and significantly above expectations of $1.9 billion. In the conference call, Goldman attributed the beat to higher revenues from equity investments, lending, and debt investments.

Stock Price Outlook

Goldman's stock finished the day slightly higher, although it was well-off its open. This year, Goldman's shares have significantly outperformed its peers in the banking industry. The Financial Select SPDR ETF (XLF  ) is down 31% year to date, while Goldman is down 8% over the same period.

The stock is about 20% lower from its pre-coronavirus highs, while it's 55% above its March lows. From early-June, the stock has been trading in a relatively, tight sideways range between $180 and $210. Given that Goldman has delivered two standout reports during this sideways trading, there's an increased chance that it will break out to the upside.