Citi Warns U.S. Equity Positioning May Face Further Pressure
Citi has warned that the recent decline in technology stocks may not yet be complete, with investor positioning across global equity markets showing signs of significant weakening. The bank noted a sharp shift in Nasdaq positioning as long positions remain at a loss and bearish flows dominate large-cap equities. In Europe, growing caution is evident as indices like DAX move into outright bearish territory while bullish sentiment wanes. Citi also highlighted the risk posed by crowded short positions, which could lead to market rebounds if investor sentiment stabilizes or macroeconomic data surprises positively. Asian markets remain under pressure with South Korea's KOSPI identified as particularly vulnerable due to elevated positioning despite recent declines. The bank emphasized that upcoming earnings reports will be critical in determining whether equity positioning begins to stabilize. The report underscores a broader trend of risk reduction and defensive positioning across global equities, driven by the technology sector downturn.
Topics: European markets investor positioning Nasdaq selloff risk reduction U.S. equities