(Bloomberg) -- Households and corporations will buy an additional $500 billion of U.S. stocks through the year-end, even as equities trade near record highs, according to Goldman Sachs Group Inc.
The splurge is set to happen amid a record $5.5 trillion of cash that’s sitting idle, having swollen through the pandemic, Goldman strategists led by David J. Kostin wrote in a note. They expect corporations to be the biggest source of equity demand for the rest of 2021, with buybacks set to accelerate and issuance poised to slow from peak first-quarter levels.
In the first quarter, households bought a net $172 billion of equities, Goldman said, with demand set to be boosted further by swollen levels of cash and growing market participation by retail investors that has led to the wild swings seen in so-called meme stocks this year.
Investor appetite for equities shows no sign of abating, even as U.S. and European stocks trade close to record highs and as U.S. Federal Reserve officials signal they’re getting ready to scale back stimulus.
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