At HSBC Corp., chief multi-asset strategist Max Kettner said it’s not time to pounce just yet, with some tests still ahead, but that a continued drop would be a sign to boost exposure. Citigroup Inc.’s Scott Chronert has echoed that, should the S&P 500 Index draw back near May’s levels.
The stock market’s pullback this month ended a five-month winning streak for US equities, when prices rallied strongly on optimism that the Federal Reserve was poised to finish its aggressive rate hiking without derailing the economy’s growth. The gains were also fueled by excitement about the potentials of artificial intelligence, contributing to a surge in the prices of tech stocks like chipmaker Nvidia Corp.
Citigroup’s Chronert said late last week that a fall in the S&P 500 back to 4,200-4,300 — around where it was from late May and early June — would create an “attractive re-entry point” for long-term and tactical investors. It was trading around 4,390 on Monday afternoon. “But we’d use such renewed sell-offs to scale up exposure to equities further, particularly in US equities,” he said in a client note Monday.
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