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Citi: Bullish positioning in US equities high but Nasdaq momentum fading

Published 06/25/2024, 04:59 AM
Updated 06/25/2024, 05:00 AM
© Reuters.  Citi: Bullish positioning in US equities high but Nasdaq momentum fading
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Investors still favor the US over European equities, with the bullish positioning in the S&P and Nasdaq rising last week, though the momentum for the latter is slowing, Citi strategists said in a Monday note.

“Across both S&P and Nasdaq new risk flows were offset by near similar amounts of long covering activity,” analysts wrote.

“S&P positioning is now near neutral, whereas Nasdaq bullish levels have reached the 94th percentile, however, average profits have moderated back to 1.5%,” they added.

In Europe, net positioning continues to decline, with political risk remaining a primary concern for investors. Despite European markets finishing the week higher, flow trends showed little change.

The FTSE and DAX saw significant declines, with DAX positioning now moderately bearish. Eurostoxx positioning remained unchanged, while European bank positioning returned to neutral.

Elsewhere, there has been renewed interest in Asia’s KOSPI and ASX, with bullish positioning accelerating in recent weeks. Both markets are moderately long but not extended, Citi noted.

As for China, Hang Seng stands out near 3-year highs, though domestic China-A market positioning remains neutral and non-consensus.

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