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As Markets Slide, Here Is Goldman's Bull Case: $125 Billion In January Inflows

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by Tyler Durden
Tuesday, Dec 21, 2021 - 01:20 AM

While Goldman's uber-bullish case for a year-end rally appears to have fallen apart now that even Santa has caught covid, the bank refuses to capitulate and in his latest Tactical Fund Flow notes, Goldman trader Scott Rubner expects the current market volatility, which has led to a near uniform negative sentiment and widespread hedge fund deleveraging, to reverse for several reasons - discussed below - including one very big one: over $125 billion of equity inflows in January.

As Rubner explains, there are two key pillars to his thesis. First is that global equities have seen more inflows in 2021 than in the past 25 years combined, a dynamic that "needs to change before a larger correction can occur." The second, and more important catalyst, is that January is the month when most of the capital is deployed, i.e., "January typically sees 134% of inflows (the rest of the 11 months -34%)." And with every private wealth manager in the world right now pitching increased allocations into equities (out of cash and out of bonds), Goldman calculates that keeping 2021 pace, "This would be $125BN worth of inflows quickly in January."