Title: US Equities Remain Bullish Despite Weakening Momentum, Citi Strategists Say
Investors continue to show optimism towards US equities, but recent trends in risk flows suggest a slight decrease in momentum, according to Citi strategists. Despite expectations of policy easing in the US, investor enthusiasm remains cautious.
Recent data shows new risk flows entering the market, but positioning activity is mixed, resulting in only a modest increase in bullish positions. The Nasdaq, in particular, is showing signs of risk, with a high percentage of long positions currently in loss.
Citi warns that a further decline in the Nasdaq could lead to significant losses and increase downside pressure. However, US stocks saw gains on Friday, with the Dow setting a new record and the S&P 500 and Nasdaq also rising.
In Europe, equity indices saw positive movement, supported by improving inflation outlook. Investor sentiment in Europe remains constructive, with new risk flows emerging across indexes. However, positioning in Asia tells a different story, with investors facing macroeconomic challenges and growing bearish sentiment in China A50.
Analysis: Overall, the market is showing signs of optimism but with caution. US equities remain a favorable investment option, but risks are present, especially in the Nasdaq. European markets are seeing positive movement, while Asian markets are facing challenges. Investors should remain vigilant and consider diversifying their portfolios to mitigate risks and seize opportunities.