LONDON, Jan 16 (Reuters) - Investors are optimistic that the return of Donald Trump to the White House next week will boost the U.S. market, with Goldman Sachs anticipating a rise in stock prices due to the anticipated increase in company buybacks—the largest expected in at least five years.
The corporate stock buyback period is set to commence on Jan 24. Goldman strategist Scott Rubner, in a note to clients sent on Wednesday and viewed by Reuters on Thursday, stated that companies representing 45% of the value of the entire S&P 500 may be authorized to repurchase their shares.
Goldman predicts that companies could invest around $1.07 trillion in buying back their own stock this year. Conversely, global investors deposited approximately $143 billion into money market funds in the week ending Jan 10, the most significant influx since March 25, 2020, according to Goldman.
A substantial influx of cash into money markets typically accompanies market volatility, as investors seek safety in perceived secure assets. Rubner suggests that this time, it may be attributed to informed investors biding their time before re-entering the stock market.
Rubner emphasized, "This is straight up cash, homie," and added, "money is moving and ready to buy equities once the headlines (and prices) start to settle down."