The Santa Claus rally of shares will start already this week, predicts Goldman Sachs

The rising stock market, which is often seen at the end of the year, will start this week in the United States, the investment bank estimates Goldman Sachs stock broker Scott Rubner. Bloomberg reports on the subject.

Rubner states in his message to his clients on Friday that the euphoria of small investors is accelerating in stocks and cryptocurrencies just as the stocks are entering their historically best profit season of the year, i.e. towards the end of the year. Rubner also points out that at the same time companies’ enthusiasm to buy their own shares is increasing, which supports that the rise would start in the coming days.

Rubner estimates that the rally, which at the end of the year is sometimes also called the “Santa Claus rally”, would raise the S&P 500 index, which describes the stock performance of large US companies, to 6,200 points, which would mean an increase of almost four percent from the current 5,969 points.

“I don’t think many will eat turkey this Thursday and then short the S&P 500,” Rubner writes in the post, referring to Thursday’s US Thanksgiving Day.

Rubner also points out that the past three months saw the largest inflow of money into the U.S. stock market since 2021, and November is on track to become the largest monthly inflow ever.

The S&P 500 has risen 3.2 percent since the presidential election in early November. On the other hand, the Russell 2000 stock index of smaller companies has risen clearly more, 6.5 percent. Rubner writes that typically in the United States in an election year, the rally in stocks has been prolonged into January and dissipated before the inauguration of the president at the end of January. Donald Trump is scheduled to take the oath of office on January 20.

“Historically, good years tend to follow good years for US stocks, and January is when capital is mobilized from the largest asset base,” he writes.