Goldman Sachs Says S&P 500 Price Target of 6,000 May Be ‘Too Low’ Via Investing.com

Investing.com — In a note to clients on Wednesday, Goldman Sachs analysts raised the possibility that their 6,000 price target for the S&P 500 may actually be “too low,” signaling even more bullish sentiment for U.S. stocks as the year progresses.

According to Goldman Sachs, they expect a strong rally starting October 28, despite the current short-term market turbulence.

However, the short-term outlook is more cautious. Goldman Sachs is warning of increased volatility over the next three weeks, predicting that the market will react strongly to daily headlines.

The bank wrote that it was “preparing for further volatility and the market to overtrade the securities and daily themes”.

Analysts note a significant drop in gamma, which fell by $14 billion, the biggest change in its data set.

This suggests the market has more wiggle room and, according to Goldman, could lead to a near-term decline.

Despite these near-term concerns, Goldman Sachs remains bullish on the year-end outlook. They highlight strong systematic exposure, institutional investors and heavily invested hedge funds.

However, the blackout window for corporate buybacks until October 25 means that a key driver of market support will be temporarily absent.

“Corporate America is in a lockout window until October 25. The largest buyer of US stocks in 2024 may buy 35% less stock during the closed window,” explains Goldman Sachs.

Once that window closes, Goldman expects redemptions to pick up strongly in November and December, supporting further gains.

Additionally, analysts see growing demand for Chinese stocks, noting that “this time is different” and pointing to increased daily demand from investors.