As the calendar turns towards the end of 2024, U.S. stocks are poised for what could be an historic year-end rally, according to Scott Rubner, a noted Goldman Sachs (GS) analyst. Despite a brief post-election lull, the market has shown signs of breaking out, with the S&P 500 (^GSPC) already boasting a 24% advance for the year and setting over 50 all-time highs. Rubner, who has set a year-end target of 6,300 for the S&P 500, predicts that the market's consolidation phase will soon give way to significant gains, potentially starting as early as this week.
Rubner's analysis, shared in a recent client note
, suggests that the post-election period, often marked by market uncertainty, is typical and historical data supports a strong rally. "Next week typically starts the year-end rally, including some of the best trading days of the year into Thanksgiving," he noted, pointing out that in election years, this rally can extend into early January.
The stage is set for this bullish scenario by several favorable economic indicators and policy expectations. The Federal Reserve's anticipated interest rate cuts are expected to stimulate investment by reducing borrowing costs. Meanwhile, the domestic economy has shown resilience, shrugging off any recessionary fears that lingered earlier in the year.
Adding to this optimistic outlook are the policy proposals from President-elect Donald Trump's incoming administration, which are perceived as pro-growth. These factors combined have led Wall Street analysts to revise upwards their forecasts not just for the closing months of 2024 but into 2025.
The S&P 500's performance this year has been nothing short of spectacular, contributing to nearly $6 trillion in market value. This growth trajectory, as Rubner and others at Goldman Sachs point out, is not just a flash in the pan but part of a continuing bull market trend.
Historical data from Goldman Sachs, covering market performances from Election Day to year-end since 1928, indicates an average gain of 3.4% for the S&P 500 during this period. Given the current economic conditions and market sentiment, many on Wall Street are betting this year could surpass that average, potentially making 2024 one of the best years on record for stock market gains.
This anticipated rally is not just a matter of historical precedent; it's backed by a confluence of economic and political developments that suggest a robust end to the trading year. Investors, encouraged by a strong domestic economic backdrop and the prospect of policy-driven growth, are likely to continue driving the market upward, aiming to capitalize on what could be a notable year-end rally.