Goldman Sachs Raises S&P 500 Target to 6300 as October Rebound Looms

Goldman Sachs recently revised its year-end target for the S&P 500 index for 2024, elevating it from 5600 to 6000 points. Furthermore, the bank has adjusted its 12-month target from 6000 points to 6300, reflecting a more bullish outlook on the U.S. equity market.

According to Scott Rubner, a technical strategist at Goldman, his confidence in the upward trajectory of the U.S. stock market is significant enough that he worries about potentially setting the S&P 500 target too low. He predicts a substantial rise in the index in the final months of 2024, consistent with historical patterns. While a brief downturn is anticipated within the next three weeks, Rubner remains optimistic about the market's performance towards the year's end, with expectations of a rebound starting from October 28.

Rubner highlights historical data from the past century, noting that markets typically experience a dip in October, followed by a rebound beginning around October 27. In addition, he points out that in election years, similar trends often occur, with markets showing an upward trend around November 5.

The strategist also notes that U.S. companies are currently under a share buyback blackout period, set to end on October 25. This temporary restriction limits corporate stock repurchasing capabilities, but once lifted, the $974 billion in approved buyback plans from September could drive market gains.

Additionally, Rubner emphasizes that as American companies prepare for the upcoming earnings season, anticipated to commence around October 25, robust results could further bolster stock prices. The upcoming period marks a significant disclosure phase, where approximately 61% of S&P 500 companies will report earnings ahead of the election.

Expecting heightened volatility, Rubner advises that investors should brace themselves for increased market fluctuations over the next few weeks, as daily news and emerging themes could provoke pronounced market reactions. He acknowledges the market's greater latitude for day-to-day volatility, contributing to a dynamic trading environment.