Citi Says Stock Positioning Has Improved, but Tech Disappointment Still Risks Further Correction
Summary
- Citi said selling in U.S. stocks eased crowded positioning, leaving the market backdrop healthier in the short term.
- Citi said another correction could follow if expectations for the Nasdaq, artificial intelligence (AI) investment, large technology stocks earnings and the semiconductor cycle weaken.
- Citi said investor positioning in European equities is improving, while the Kospi (KOSPI) could face a bigger hit if expectations tied to its AI-driven investment narrative weaken.
Forecast Trend Report by Period
Citi said the recent pullback in U.S. stocks has unwound some of the market’s previously crowded positioning. Still, the bank warned that further declines remain possible if expectations surrounding technology shares begin to fade.
Walter Bloomberg reported on June 9 that Citi said in a note that last week’s equity selloff eased crowded positioning in the U.S. stock market, creating a healthier near-term backdrop.
Bullish bets centered on the Nasdaq, however, remain elevated.
Citi said the market could face another correction if key tech-related drivers — including artificial intelligence investment, earnings from large technology companies and the semiconductor cycle — fall short of expectations.
The bank said investor positioning in European equities is improving gradually.
By contrast, it said South Korea’s Kospi is heavily reliant on an AI-driven investment narrative, leaving it relatively vulnerable if expectations tied to that theme weaken.
Major stock markets have recently rebounded to near record highs on a technology-led rally. Investors are now focused on whether the AI investment cycle will continue to drive the market’s direction.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
