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Bullish positioning in US equities has been ‘getting extra prolonged’ – Citi

Jul 9, 2024 | blog

According to the newest Citi Equity Markets Positioning Model notice, the early give attention to US elections, sparked by the presidential debate, has not curbed the danger urge for food and bullish positioning in US equities.

Positioning has been “getting more extended,” based on analysts. “Nasdaq futures and ETF positioning have both become very extended and this is now the most bullish positioning by some margin.”

Meanwhile, the latest S&P flows have additionally been bullish, though the analysts notice that blended historic futures flows and up to date ETF outflows depart a extra balanced setup.

In Europe, the latest UK and French elections resulted in European futures positioning turning impartial previously month.

Ahead of these elections, Citi mentioned traders have been principally de-risking, with open curiosity falling. “Previously bullish positions across Europe had started fading before the election campaigns began but have now turned neutral or slightly bearish,” they acknowledged.

“Elections have now passed but for France there is little visibility on the formation of a government, not to mention uncertainty on French policies,” the analysts write. “At this juncture it’s hard to see a meaningful change in positioning for continental Europe without some clear positive catalysts. The upcoming reporting season could be a catalyst.”

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