Citi strategists have upgraded US equities to an Overweight position as current financial and market conditions are expected “to keep risk outlook bullish.”
Moreover, the Wall Street giant highlighted that equities continue trading toward a soft landing scenario. As such, strategists have introduced several position changes. They have slightly reduced their equity overweight, now favoring the US market. In the rates sector, they maintain an overweight position in the core EU and have moved to a long position in US fixed-income.
“Given the uncertainty, scenario analysis is the best way to deal with such a range of outcomes,” Citi wrote. “We run several and the results are somewhat as expected – bonds do well in recessions, equities in a soft landing.”