Expect Pre-Election Market Correction: Goldman

But after the election, he models an “anti-momentum unloved rally” and expects the other 495 names in the S&P 500 Index to overtake this year’s top five outperformers, like Nvidia Corp. Instead value and small-cap stocks could beat the big tech winners.

“Regardless who wins the election, the election result is a clearing event for risk, and election returns exceed non-election years for November and December,” he wrote.

Rubner’s models show that going back to 1900, the average return for the broad-market gauge in November and December was 2.9%, versus 3.4% during election years.

The U.S. stock market is currently on pace for its 32nd record high this year with the S&P 500 hovering around 5,500, fueled by technology shares.

Wall Street traders extended bullish best on U.S. stocks on signs of cooling inflation that reinforced bets the Federal Reserve will be able to start cutting interest rates this year.

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