Goldman hikes S&P target while shorts pile in — bet on the squeeze higher
Goldman Sachs just raised its year-end S&P 500 target from 7,600 to 8,000 because they expect company earnings to boom. At the same time, a record amount of money is betting against stocks — yet the market keeps climbing.
Idea
When Goldman Sachs — one of Wall Street's most influential banks — raises its forecast, big investors take notice and often add to their stock holdings. The reason is straightforward: they expect company profits to grow faster than previously thought. The real kicker is that short sellers have bet record amounts against stocks even as the market rallies. If prices keep rising, those skeptics will be forced to buy back shares to limit their losses, which pushes the market up even more. That 'short squeeze' effect can turn a regular rally into a explosive one.