'I'm worried that my 6K target is too low,' Goldman Sachs strategist says on S&P 500 target

By Louis Goss

$974 billion worth of share buybacks that were previously authorized in September are now set to be unleashed following the end of the blackout period

Goldman Sachs' technical strategist Scott Rubner has said he is so bullish on U.S. stocks that he is now worried his S&P 500 index price target is too low.

"I am worried that my 6K target is too low," Rubner said in a note Wednesday as he predicted a major rally in the S&P 500 index this November and December will push the index over 6,000 points by the end of 2024.

The technical strategist explained that he believes U.S. stocks are on course to rally in the final months of 2024, in line with historical trends, following a temporary slump over the next three weeks.

"I am bullish on US equities for a year-end rally starting on October 28th," Rubner said.

The S&P 500 index SPX has increased by 956 points, or 20%, in the year-to-date to 5,698 points.

Rubner pointed to data from the past 100 years showing markets have historically dipped in October before starting to surge on Oct. 27.

In election years, markets have historically followed this trend while rallying around Nov. 5 as well.

The Goldman Sachs' strategist noted that U.S. corporations are currently in a blackout period that ends on Oct. 25, meaning their stock repurchasing power is currently limited.

He explained that $974 billion worth of share buybacks that were previously authorized in September are now set to be unleashed following the end of the blackout period.

This unleashing of U.S. corporate share buyback initiatives on Oct. 25 will help fuel the rally in U.S. stocks, Rubner said.

Rubner noted demand for put options in the run up to the U.S. elections could also help fuel the surge in U.S. stock markets even further.

The upcoming corporate earnings reporting season could also help push up stock prices further, if results fall in-line with analysts' relatively high expectations, Rubner said.

"The Superbowl of US earnings is the week of October 25th and 61% percent of the S&P 500 market cap reports earnings in the two weeks before the election," Rubner said.

Now, investors should expect to see a period of heightened volatility over the next three weeks, ahead of the expected rally, Rubner said.

"I am bracing for added volatility and the market to over-trade daily headlines and themes," he said. "The market now has the ability to move more freely."

-Louis Goss

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10-02-24 1024ET

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