Goldman Sachs' technical strategist, Scott Rubner, has expressed such a strong bullish sentiment towards the U.S. stock market that he is now concerned he may have set his price target for the S&P 500 index too low.
Rubner stated in a report on Wednesday: "I worry that my 6000 target is too low." He forecasted that the S&P 500 index will experience a significant surge in November and December 2024, breaking through the 6000 mark by the end of 2024.
The technical strategist explained that he believes the U.S. stock market will see an uptick in the last few months of 2024, aligning with historical trends, while a temporary downturn may occur within the next three weeks. Rubner said: "I am optimistic about the U.S. stock market's rise at the end of the year, expecting it to start from October 28th." As of now, the S&P 500 index has risen by 956 points year-to-date, with a 20% increase.
Rubner cited data from the past 100 years showing that historically, the market typically declines in October and then rebounds starting from October 27th. In election years, the market also tends to follow this pattern and begins to rise around November 5th.
The Goldman Sachs strategist also pointed out that U.S. corporations are currently in a buyback blackout period, which will end on October 25th, meaning that the ability of corporations to repurchase their own stocks is currently limited.
Rubner explained that the $974 billion stock repurchase plan approved in September will be unleashed after the blackout period ends, which will boost the U.S. stock market's rise. He also noted that the demand for put options in the market on the eve of the U.S. election could further drive the U.S. stock market's rise.
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Furthermore, the upcoming corporate earnings season may also push stock prices higher, provided that the earnings results meet analysts' high expectations. Rubner said: "The 'Super Bowl' of U.S. corporate earnings will take place the week of October 25th, with 61% of the S&P 500 index's market value reporting earnings in the two weeks before the election."
Rubner expects that before the anticipated rise, investors will experience a highly volatile period in the next three weeks. He stated: "I am preparing for increased market volatility, which may overreact to daily news and themes. The market now has greater freedom to fluctuate."
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