Goldman Sachs Analysts Bullish on S&P 500, Expect Strong Rally Starting October 28
In a note to clients, Goldman Sachs analysts raised the possibility that their 6000 price target for the S&P 500 might be "too low," signaling bullish sentiment for U.S. equities. Despite current market turbulence, they expect a strong rally to begin on October 28.
However, the near-term outlook is cautious, with heightened volatility predicted over the next three weeks. The analysts warn that the market will react heavily to daily headlines, bracing for added volatility and over-trading.
Gamma has seen a significant drop of $14 billion, giving the market more freedom to move. This could lead to a downside skew in the short term. Despite these concerns, Goldman Sachs remains optimistic about the year-end outlook, highlighting strong systematic exposure.
The blackout window for corporate buybacks until October 25 means a key market support will be temporarily absent. Once the window closes, Goldman expects buybacks to resume strongly in November and December, supporting further gains.
Analysts also see growing demand for Chinese equities, emphasizing increased daily demand from investors. This shift in sentiment could impact market movements in the coming months.
In conclusion, while near-term volatility is expected, Goldman Sachs remains positive about the future of U.S. equities. Investors should keep an eye on the market reactions to daily headlines and be prepared for potential fluctuations. The resumption of buybacks in the coming months could provide a boost to market performance.