Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Barclays sees enough space for a broadening of the stocks rally

Published 01/31/2024, 08:20 AM
Updated 01/31/2024, 08:23 AM
© Reuters.  Barcalys sees enough space for a broadening of the stocks rally

Barclays’ team of strategists sees enough room for a broader stocks rally, particularly if the economy manages a soft landing. This is despite the massive gains in the equity market in recent months.

Accordingly, the stock positioning isn't overstretched outside of the US and technology sectors, indicating potential for expansion in other areas.

The strategists suggest that, despite the recent robust performance, stocks might take a short pause, but the "buy the dip" mentality could prevail again. This is especially likely considering that equity allocations from mutual funds and retail investors are not at excessive levels.

Equity positioning has increased across the board in January, with CTAs (Commodity Trading Advisors) being fairly long. Moreover, macro hedge funds and risk control funds have also upped their exposure, which might amplify market downturns if any adverse events occur.

There is still a significant amount of money in money markets, which could potentially flow into riskier assets as economic growth rebounds and interest rate cuts are expected to start more aggressively in the second half of the year.

The re-risking trend observed so far has been concentrated in US and tech stocks, with Japan also seeing substantial interest. However, China and Europe have not been as favored, with long-only funds and systematic strategies still underweight in these regions.

Sector-wise, European cyclicals such as luxury, autos, mining, chemicals, banks, and energy are not overcrowded, presenting potential opportunities for investors looking to diversify their portfolios.

Latest comments

Wonder what pills Barclays strategies are popping......
You sais same thing in bubble .call m before crash There is no more room its over extended in short period of time& ignoring war & few soldiers already gone
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.