Is the darkness before dawn for US stocks? Goldman Sachs fund flow experts say they turned bullish on technology at the end of August

Expert in studying fund flows, Scott Rubner, Managing Director of Global Markets at Goldman Sachs, mentioned in a report in June that August has historically been a bad month for the US stock market. He pointed out that since 1928, the first half of August has been one of the worst two-week trading periods for the S&P 500. Recently, Rubner's reports no longer bear such a negative view on the August stock market. In the report, he stated:

"I am very pessimistic about the global macro environment, so I will turn strategically bullish on the stock market on August 30."

"This will be the last time I am bearish on the August stock market. We are ending the period of the most severe mismatch between supply and demand for stocks in August. From the perspective of a baseball game, we are in the 8th inning of a 9-inning adjustment (game)."

Has the stock market passed its low point? Rubner's report believes it has not hit rock bottom yet, but it is very close, so he mentioned that he is starting to slowly buy in. In other words, the US stock market is experiencing the darkness before dawn. The expected sustainability of systematic macro strategy stock supply may not be fully clear until next week. However, he has seen enough evidence and reduced positions to prove that the worst market technical aspects are already behind us.

In his June report, Rubner pointed out that August is an extremely tricky and illiquid trading month. On August 28, the previously referred to as "the most important stock on Earth" by Rubner, NVIDIA, will release its financial report. Rubner's report this time believes that the market trend after NVIDIA's financial report will mark the low point for this S&P super heavyweight stock and the darling of artificial intelligence (AI) concepts.

At the same time, Rubner is also focusing on the Jackson Hole Economic Policy Symposium on August 22nd to 23rd, an annual global central bank governors' meeting held in Jackson Hole, Wyoming, USA. He believes that there is a certain risk of shorting at this meeting.

Recently, the market's attention has been focused on the US CPI report to be released this Wednesday. The straddle options imply that the volatility of the US stock market will be around 1.25% at that time. In Rubner's view, the downside potential of the US stock market is greater than the upside potential.

Since liquidity issues are common in August, what about September? Rubner's report predicts that from the rebound after the US Labor Day in September, the position layout will be very clear. He plans to bottom fish in the first half of September and advise clients when the situation is completely clear.

Rubner points out that the second half of September is the worst two weeks of the year. The seasonal changes in 2024 are very obvious, sometimes even accurate. The buyback window from August to September has historically been strong. The buyback execution rate for these two months is 20.7%, the second highest this year, only behind November and December at 21.1%. Goldman Sachs currently estimates that 90% of S&P 500 component stocks are in an open buyback window, which will close on September 6thAt the same time, there will be a usually large-scale quarterly rebalancing of pension funds in September, as global bond yields decline, pension funds will further sell off equity exposures and switch to fixed income products.

In terms of the market, starting from now, Rubner's baseline forecast is: with the easing of technical pressure, there will be buying opportunities on dips in the short term; late September will be a tricky trading environment, especially before the U.S. presidential election; the fourth quarter will hit new highs, with November and December leading the gains