FX168 Financial News Agency (North America) Standard & Poor's 500 Index has already set 46 closing records this year. According to data from Goldman Sachs Trading Department on Wednesday, October 16, this upward trend is expected to continue in the last few months of 2024. #Market Outlook for the Second Half of 2024#

(Image source: Bloomberg)

Scott Rubner, Global Market Director and Tactical Expert at the bank, estimates that the benchmark index of the US stock market may exceed 6,000 points by the end of this year. According to his calculation of data since 1928, the historical median return of the Standard & Poor's 500 index from October 15 to December 31 is 5.17%. In election years, this median return rate is even higher, slightly above 7%, indicating that the index level at the end of the year will reach 6,270 points.

Bloomberg's compiled statistics seem to support the optimistic view of the fourth quarter. Since 1928, only 25 years have seen negative returns in the fourth quarter. However, there is a significant difference in historical return rates, with a 21% increase in 1998 and a disastrous 29% decline at the end of 1929.

Rubner had previously predicted a sell-off in the stock market before the US presidential election, but has now changed his view. At the end of September, he noticed investors selling call long positions and buying put spreads on the Standard & Poor's 500 index, due to concerns about short-term seasonal factors and technical positioning. However, the US stock market has since risen, with fund managers joining the buying ranks, and investor sentiment noticeably improving.

In a report to clients on Tuesday, Rubner pointed out: "The selling in the stock market has ended, and the year-end rebound is beginning to show, with clients shifting from left tail hedging to right tail hedging as institutional investors are forced to enter the market." He added that concerns among professional investors about their performance significantly lagging behind the benchmark have intensified.

Rubner also stated that when the stock buyback yield lockup window reopens on October 25, US companies will resume their role as major stock buyers. With the end of the fiscal year for mutual funds at the end of October, these funds may shift from selling to buying for tax reasons, driving the Standard & Poor's 500 index up by 22% this year. He mentioned that individual investors usually also become net buyers of stocks in November.

In addition, trend-following systematic funds may also become potential buyers. Volatility control funds typically buy stocks when the market is calm, and are expected to resume buying after the November elections. If volatility readjusts after the election, there will be room for market growth.

Finally, Rubina mentioned that the positioning of the options market also shows a 'healthy rebound', with an increase in gamma values - an indicator of derivative volatility that can act as a market buffer when traders buy low.