A rare scene is about to appear in the US stock market! The S&P 500 may aim for 6,200 points?

The S&P 500 Index (SPX) is expected to achieve a gain of over 20% for the second consecutive year. Historical data indicates that such occurrences are indeed very rare.

Boosted by Trump's victory last week, the S&P 500 Index has risen approximately 26% year-to-date. Previously, this major index had increased by over 24% in 2023. According to Deutsche Bank, if the S&P 500 Index ends the year with a gain exceeding 20%, it will mark the third occurrence of such a scale of consecutive gains in the past century.

Deutsche Bank strategist Parag Thatte stated that the recent rise in U.S. stocks was driven by Trump. In a report to clients last Friday, he said, "As we pointed out earlier, a rebound after a closely contested election is historically normal," adding, "but the current (rebound) is clearly faster than in the past."

Before the stock market soared to record highs last week, he described the stock market's rise as "abnormal." He noted that the S&P 500 Index remains within an upward channel over the past two years but is now approaching the top of that channel.

Thatte mentioned that Deutsche Bank's measure of stock positioning did not decline to a reduction before election day, which is different from typical phenomena in recent election cycles.

Nevertheless, U.S. stocks experienced the usual post-election rebound, with estimated inflows into stock funds totaling $24 billion on Wednesday and Thursday of last week.

In his view, part of the reason for last week's stock market rise was the "plummeting" of the equity volatility premium, which only intensified on the eve of the election. He noted that such situations are common when looking back at past economic cycles.

"The S&P 500 Index options (volatility) curve was pricing volatility for the day after election day at over 35%, while the current pricing is in single digits. The volatility index and implied volatility premium have also significantly declined," the strategist wrote.

Historical data suggests there is reason to believe that U.S. stocks have more upside potential.

Wall Street investment bank Oppenheimer reviewed instances in the past 11 years where the S&P 500 Index rose over 20% in the first 217 trading days and found that the minimum gain by year-end was 0.5%. More importantly, Oppenheimer discovered that a gain matching the median growth would push the S&P 500 Index to close above 6200 points this year.

Data from JPMorgan Chase & Co.'s trading department indicates that the stock market's rebound by the end of this year may be stronger than when Trump won the presidency eight years ago.

Andrew Tyler, head of U.S. market intelligence at JPMorgan, wrote in a report to clients on Monday, "I expect (U.S. stocks) to have a higher return in 2024 than in 2016." One significant advantage for the S&P 500 Index is the weak growth outside the U.S., with economic growth in the UK, EU, Canada, and Mexico all being weaker than at that time He believes that the so-called "Seven Giants" of the U.S. stock market will continue to drive the market, and financial stocks will be the best-performing sector in the S&P 500 index by the end of the year, but he holds a cautious attitude towards the energy sector due to disappointing earnings in that industry this quarter.

However, JP Morgan's report does not predict the situation for 2025, as the risks are greater in that year. The Federal Reserve may act cautiously regarding interest rate cuts, partly because many of Trump's policies are considered inflationary.

The rebound in U.S. Treasury yields may limit future stock market gains. JP Morgan equity research strategists have already warned that U.S. Treasury yields approaching 5% will be an obstacle to the rise of risk assets next year.

In any case, many Wall Street professionals are optimistic about the U.S. stock market before the end of the year. Part of the reason is simple: the U.S. election has eliminated uncertainty, and the stock market is now entering a seasonally positive period