Investor positioning in US equities presents a mixed picture, according to Citi Research’s Chris Montagu. While bullish sentiment towards the S&P 500 has marginally increased, both the Nasdaq and small-cap Russell 2000 have experienced declines. This shift occurs amidst growing uncertainty surrounding potential interest rate cuts in December. Montagu noted that despite recent changes, overall net positioning across US equities remains moderately bullish. However, the accumulation of profit levels has been limited, thereby reducing potential positioning risks.
Montagu further elaborated that flows have been varied, with long unwinds and new short positions significantly contributing to the decline in net positioning for both the Nasdaq and Russell 2000 indices. The current trend reinforces observed weakness across tracked US indices, pushing profit and loss levels back towards neutral territory.
In contrast to the US market, European Banks are experiencing strong inflows, with bullish positioning on the rise. Positioning levels are now comparable to those observed on the FTSE 100. Across Asian markets, both the KOSPI and Hang Seng indices maintain net long positions, although the KOSPI faces elevated profit-taking risks. Citi Research provides comprehensive financial analysis and advisory services to clients worldwide.
