Goldman Sachs says there are four reasons why the stock market is expected to continue to soar to new all-time highs

• John Flood of Goldman Sachs says the U.S. stock market is poised for a further rebound from recent record highs.

• Positive market and seasonal factors point to more opportunities ahead, and bullish sentiment has not yet peaked.

• Retail investors often sell stocks to pay taxes, causing the market to fall on tax day and then rebound.

A strategist at Goldman Sachs thinks there's more momentum left in this year's stock market rebound.

Goldman Sachs Global Banking and Markets Americas Equity Sales and Trading Director John Flood said at a briefing on Friday that investors worried about a stock market bubble can rest easy, as he believes the S&P 500 will soar further for four reasons.

First, the strategist predicts a late-April rally, as the historical pattern has been for investors to take profits before tax season, leading to a temporary sell-off and then a resurgence later in the month.

"Retail investors tend to sell stocks to pay their tax bills - which means we often see the market slide on tax day and then rebound afterward," he said.

Secondly, he pointed out that listed companies remained important buyers of their own stocks. Under these circumstances, the tightening supply of stocks would drive a huge increase in market demand, thereby fueling the upcoming stock rebound.

"Corporate repurchasing remains strong. We expect repurchases to reach $925 billion this year," he said, citing a Goldman Sachs research report.

Thirdly, confidence for the future comes from money market funds, which are set to see massive inflows of $1.6 trillion since 2023. according to Flood, this suggests that "there is still a lot of dry powder" available for investors to put into the stock market.

Finally, Flood notes that sentiment has not yet reached "all bullish" levels, as hedge funds have seen capital outflows recently. Peak bullishness is often a contrarian indicator, suggesting that the next move in stocks is likely to be down, but the market isn't there yet.

"Hedge funds have been net sellers of equities and shorting activity has increased significantly in recent weeks," he said.

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