Wall Street is in a bullish mood! Goldman strategist calls for S&P 500 to soar past 6,000 by year-end
Scott Rubner, a strategist at Goldman, said on Tuesday that the stock market appeared ready to rebound by the end of the year, which could push the S&P 500 above 6,000.
The S&P 500 closed at 5,859.85 on Monday, its 46th closing high of 2024, and Rubner had said in early October that he was "tactically bearish" on US stocks for the next three weeks. He now believes that some negative factors are dissipating and that the trading environment for stock capital flows will be positive.
"The stock market sell-off is over and the year-end rebound is beginning to resonate, with clients shifting from left tail hedges to right tail hedges," Rubner said. "Given 'FOMU' (fear of missing out), institutional investors are now being forced into the market."
Rubner said that Goldman's trading desk has been answering questions about the best execution strategy for a potential "Trump trade" rebound. "This is new, and it is expanding the stock market rebound."
Prediction platforms such as Polymarket and PredictIt show former president Donald Trump leading vice-president Kamala Harris in the US presidential election, while polls show a tight race.
Factors driving stocks higher include the expiration of the US corporate tax buyback period on October 25, which has been the biggest buyer of US stocks this year, and Rubner said that companies could buy about $6bn of stock each day by the end of the year.
As the biggest seller in the market, mutual funds face a deadline of October 31.
"The pressure to sell laggards in the stock market will ease for tax reasons, while the pressure to buy winners will ease, creating a potential rebound led by cyclical stocks and Republican favourites," he said.
At the same time, Rubner said that households tend to buy stocks in November, a trend that is stronger in election years, and key market health indicators such as gamma and liquidity have improved.
"I think the S&P 500 will be far above 6,000 by the end of this year," he said.
As the US stock market enjoys its strongest rebound in nearly three decades, Wall Street strategists have been raising their forecasts for US stocks. Rubner, who has raised his forecast four times since the last few months of 2023, now has the second highest year-end target on Wall Street. Brian Belski at BMO is the most optimistic, having predicted in September that the S&P 500 could soar to 6,100 by the end of the year.