Goldman Sachs “Santa Rally Is Coming”

🌕Goldman Sachs “Santa Rally Is Coming”

1. Seasonality of the end of the year + End of the presidential election

• the possibility of Santa Rally
• This year is the year when the presidential election is over.
• Average rise +2.6% based on the S&P 500 from November 5 to the end of each year and +3.38% in the year of the election

1. The inflow of hedge funds is sustainable

• After Presidential Election Ends, Volatility Declines, Accelerating Hedge Fund Funds Inflows
• We’ve reduced our leverage ratio ahead of the presidential election, and now that uncertainty has diminished, there’s a chance that our position will shift to the high-leverage situation before the presidential election

1. November is a time when there are a lot of stock buybacks

• Nomura: End-of-Year Corporate Share Buyback Window Opens and Possible Boosts Upside
• HSBC: Share Buyback Offers Corporate Downside
• Goldman: Company Data Checks November Of The Year Is When Corporate Share Buyback Demand Is Highest
• Normally, an average of 10.4% of share buybacks are made in November

1. Treasury yields are a risk factor

• However, if the government bond rate reaches 4.6%, the pace of stock rise could be put on hold.