Goldman Sachs Predicts Incoming ‘Wall of Money’ Could Fuel Summer Stock Market Rally

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As a seasoned crypto investor with a keen eye on market trends, I find the recent bullish outlook from Goldman Sachs on the stock market quite intriguing. The prospect of passive investment vehicles pouring in billions during the third quarter and second half of the year could indeed lead to significant price surges across various asset classes, including equities and possibly crypto.

In early July, Goldman Sachs signals optimism towards the stock market with the waving of a bullish flag. This confidence arises from the expectation of significant inflows from passive investment funds during the start of the third quarter and the latter part of this year, collectively referred to as a ‘wall of money’.

As a crypto investor, I’ve come across the insightful analysis of Scott Rubner, the managing director and tactical specialist in Goldman’s global markets division. Based on his perspective, shared in a Bloomberg report, I believe stock prices could experience an upswing due to robust seasonal tendencies and potentially heightened involvement from retail investors.

As an analyst, I’ve come across a fascinating observation in Rubner’s note. He mentions the revival of retail traders around July, adding that this trend dates back to at least 1928. Remarkably, the first fifteen days of this month have historically been the most profitable two-week period for equities. However, it’s essential to note that equity returns tend to decrease after July 17th.

The S&P 500 boasts an impressive streak of positive returns in July over the past nine years, with an average gain of 3.7%. The Nasdaq 100 outperforms it, posting positive results for each of the last 16 Julys and an average return of 4.6%.

According to Rubner’s calculations, there is a projected inflow of around 0.09 percentage points or nearly $26 billion every July, based on the current market conditions and the $29 trillion mass of passive assets up for grabs.

Individual investors outside of institutions have the potential to positively impact the cryptocurrency sector as well. This comes following the introduction of Bitcoin ETFs for spot trading by institutional investors in the US markets earlier this year.

As a crypto investor, I’ve been keeping an eye on the developments in the Bitcoin ETF market. Exciting news came our way earlier this year when CryptoGlobe reported that BlackRock’s iShares Bitcoin Trust (IBIT) had surpassed Grayscale Bitcoin Trust (GBTC) in terms of Bitcoin holdings, making it the world’s largest exchange-traded fund. This means more institutional investors are gaining exposure to the price of Bitcoin through IBIT.

Experts explain that the recent trend among investors moving away from Grayscale’s GBTC to BlackRock’s Bitcoin ETFs can be linked to Grayscale’s higher fees. With the former being converted into a spot Bitcoin ETF and several similar products becoming available in the US, investors have found BlackRock’s lower-cost alternatives more attractive.

As a crypto investor, I’ve noticed an interesting development in the world of traditional finance: BlackRock, one of the largest asset managers globally, has started investing in Bitcoin through its income and bond-focused funds. Specifically, regulatory filings reveal that BlackRock’s Strategic Income Opportunities Fund and Strategic Global Bond Fund have purchased shares of the iShares Bitcoin Trust. This move indicates that even institutional investors like BlackRock are recognizing the potential value of Bitcoin as part of a diversified investment portfolio.

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2024-06-07 03:09