The Ultimate Guide to Investing in US Equities: Market Analysis and Predictions
In a recent note, Citi strategists revealed that investors are still bullish on US equities despite weakening momentum in the market. This indicates that while there may be expected policy easing in the US, investor enthusiasm remains tempered. Recent data shows new risk flows into indexes, but positioning activity has been mixed, with only a modest increase in bullish stances. The Nasdaq is particularly at risk, with 79% of long positions currently in loss.
Citi warns that a further decline below 19,000 could lead to a considerable build-up of losses and amplify downside pressure. However, US stocks climbed on Friday, with the Dow setting a new record at 41,563.08. The S&P 500 and Nasdaq also saw gains, closing at 5,648.40 and 17,713.62 respectively.
In Europe, equity indices rose over the week, supported by an improving inflation outlook. Positioning in Europe showed a constructive sentiment, with new risk flows emerging across the indexes. However, overall gross positioning in most regional indexes started from a low base, suggesting a positive but limited risk appetite.
In Asia, investors remain long and optimistic, particularly about and . However, persistent macroeconomic challenges are weighing on investor optimism. Bearish positioning grew over the week, with China A50 remaining the most bearish index tracked by Citi.
In conclusion, while the US market remains bullish, caution is advised as risks are evident, especially in the Nasdaq. European and Asian markets also show positive sentiment, but macroeconomic challenges could impact investor optimism. It is essential for investors to stay informed and carefully consider their investment decisions in these uncertain times.
