01-07-2025
Goldman Sachs says fastest market recovery ever can continue for the next couple of weeks
The first half of the year was a historic one, and Goldman Sachs thinks there are more gains to be had in the next few weeks. The S & P 500 roared back to all-time highs in the last two sessions of June, surging more than 20% from an April low. That marked the benchmark's fastest recovery from a sell-off greater than 15%, Goldman said. "We think this rally will continue for the next couple weeks," Goldman traders said in a note to clients. Seasonality will likely drive some of the gains in the next few weeks. Goldman noted that the S & P 500 averages a 1.3% advance in July going back to 1928. The first half of the month is even better, with the benchmark averaging a 2.4% return between July 1 and July 15. The bank's trading desk expects the rally to lose momentum in August, recommending clients hedge their positions through options. Goldman also highlighted that small caps have not participated in the rebound to the same extent as large-cap stocks. .SPX YTD mountain SPX year to date "As SPX and [Nasdaq-100] have both retraced to the highs, we want to highlight the fact that Russell 2k is still trading 11.5% below its high print," the Goldman traders said. "To quote the 1993 iconic film of the summer [The Sandlot], 'You're killing me Smalls.'" Elsewhere Tuesday morning on Wall Street, Goldman upgraded Hasbro to buy from neutral, calling for more than 15% upside. "We believe that long-term execution opportunities in the [Wizards of the Coast] segment are underappreciated by the market, while near-term macro risks to profitability in the Consumer Products segment are overstated," Goldman's Stephen Laszczyk said. "As a result, we believe that shares currently offer investors an attractive risk-reward skew with a robust catalyst path over the next ~12 months."
