Goldman Sachs Managing Director Scott Rubner believes that the brief pullback many investors are anticipating may not materialize. Rubner forecasts that the stock market will continue to rise through the end of the year, in line with seasonal trends. Historical data shows that November and December are typically the strongest months for stock market returns. Rubner points out that November 5th — which could serve as a catalyst for a "clearing event" for risk assets — may trigger investors' "Fear of Missing Out" (FOMO), thereby driving the market higher. Additionally, he believes that market-shunned themes and sectors may see the greatest gains, as these areas currently have fewer positions.

Rubner also notes that corporate buybacks and investor seasonal position adjustments may have a greater impact on the market in the next two months. He states that target-date funds, retail investors, and private wealth management firms typically rebalance their portfolios in January, April, and November. Investors holding maturing government bonds may choose to reinvest funds back into the stock market.

If the stock market performs as history suggests, the last two months of the year could bring substantial returns. Since 1928, the median return of the S&P 500 index from October 27th to December 31st is 5.2%. In election years, this return rate rises to 6.3%.

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With the reopening of corporate buyback windows, corporate buybacks may also help drive the stock market higher. According to data from Goldman Sachs' trading department, November is typically the most active month for corporate buyback transactions, with historical inflows from buybacks alone exceeding $100 billion.

Mutual funds and pension funds may also reduce some selling behavior at the end of October when their fiscal year ends. Rubner also notes that retail trading activity in popular stocks such as Nvidia (NVDA.US) and Tesla (TSLA.US) has increased again. If this trend continues, it could increase the number of buyers.

After answering a multitude of client questions over the weekend, Rubner identified a common theme: investors have shifted from asking how to hedge against selling to how to better capitalize on market opportunities before the end of the year. Rubner has been bullish on the stock market. Earlier this month, he expressed concern about whether his year-end target of 6,000 for the S&P 500 was high enough. Currently, the S&P 500 only needs to rise by an additional 3% to reach that target.