Scott Rubner, an expert on fund flows at Goldman Sachs, stated that the year-end rebound in U.S. stocks will begin this week, expecting the S&P 500 index to rise about 4% to 6200 points.
Rubner noted that as the stock market enters its best seasonal trading period, retail investor enthusiasm in both the stock and cryptocurrency sectors is rapidly increasing.
In terms of fund flows, U.S. stocks have seen the largest three-month inflow since 2021, and November may record the largest monthly inflow on record.
According to Rubner, last week's consolidation phase was very typical. Historical data since 1928 shows that this is a typical performance for U.S. stocks during this period. This week usually marks the beginning of the year-end rebound, including some of the best trading days of the year, leading up to Thanksgiving.
Rubner noted in a report to clients last Friday that demand for buybacks is also increasing among companies, which is one of the reasons why U.S. stocks may start to rebound in the coming days.
Rubner reiterated in a report two weeks ago that companies are the number one buyers in U.S. stocks, and mentioned that, according to Goldman Sachs estimates, the value of stock buybacks executed in 2024 will be $960 billion, with the value of stock buybacks in November at $100 billion.
Additionally, as the end of the year approaches with Thanksgiving, Christmas, and New Year's, global stock market holidays are coming one after another, making it very difficult to short the stock market from a liquidity perspective.
He wrote, 'I don't think there will be many people shorting the S&P 500 index after Thanksgiving on Thursday.'
Rubner also pointed out that the performance of the S&P 500 index this year is similar to that after the 2016 election, and he expects the index to rise again in December driven by U.S. stock rotation and the reflation theme.
Since the presidential election on November 5, the S&P 500 index has risen 3.2%, while the Russell 2000 index has increased by 6.5%.
Rubner pointed out that this upward trend in an election year typically continues until January of the following year, only disappearing shortly before the inauguration of a new president.
He said, 'Historically, good years for U.S. stocks often follow the previous good year, and January is when capital is deployed into U.S. stocks.' From 1996 to 2022, January has typically been the month with the highest inflow of funds into stock mutual funds and ETFs.
He raised his optimistic expectation again, claiming he 'placed an order for an SPX 7K hat.' SPX 7K represents the S&P 500 index rising to 7000 points.
The article is reprinted from: Jin Ten Data