U.S. investment bank Goldman Sachs (GS) is telling investors to prepare for a year-end Santa Clause rally.
The Wall Street firm is forecasting that a year-end rally in U.S. equities will begin this week and could push the S&P 500 Index up as much as 4% to close out 2024 at the 6,200 level.
The S&P 500 is currently trading just above 6,000, having gained 25% so far this year.
In a note to clients, Scott Rubner, a Managing Director at Goldman Sachs, says that stocks will be powered higher through year’s end by retail investor euphoria for both equities and crypto.
Rubner adds that stocks are likely to get an additional boost in coming weeks as corporate demand for buybacks accelerates.
Goldman Sachs notes that a rally in U.S. stocks has already been building as equities have seen their largest three-month inflows since 2021 and November is on pace for the largest monthly addition of investor capital on record.
The S&P 500 has gained 3.2% since the Nov. 5 U.S. presidential election, while the Russell 2000 Index of small-cap stock has gained 6.5%.
Goldman Sachs says that, in a typical election year, stock market rallies extend into January and only fade shortly before inauguration day on Jan. 20.
Rubner wrote in his note that he remains bullish on U.S. stocks heading into 2025, writing that, “Historically, good years tend to follow more good years for U.S. equities.”
The stock of Goldman Sachs is up 55% this year and trading at $602.78 U.S. per share.
