The US stock market is set to rally further from recent all-time highs, according to Goldman Sachs’ John Flood. In a recent briefing, Flood, head of Americas equities sales trading at Goldman’s global banking and markets division, outlined four key reasons why investors can expect more opportunities ahead.
First, Flood predicts a late April market surge as retail investors traditionally sell stocks to cover tax bills, leading to a temporary dip before a rebound later in the month. This historical pattern suggests a fresh uptick in the market.
Secondly, Flood highlighted the importance of publicly-traded companies buying back their own stocks. With a stock supply squeeze expected to drive up market demand, a significant stock rally is on the horizon.
Third, Flood pointed to the massive inflow of $1.6 trillion into money market funds since 2023, indicating that there is still plenty of capital available for investors to deploy into the stock market. This influx of funds suggests future confidence in the market.
Lastly, Flood noted that current sentiment is not yet at its peak bullishness, as hedge funds have been net sellers of stocks and have increased their shorting activity in recent weeks. This lack of extreme bullish sentiment typically serves as a contrarian indicator, suggesting that the next move for stocks is likely upward.
Overall, Flood’s analysis suggests that the current stock rally has more room to run, with market tailwinds and seasonality pointing towards further gains in the near future. Investors can look forward to potential opportunities as the market continues to rally from recent highs.
