Citi strategist: Fund flows show the market is not enthusiastic about the rise of U.S. stocks

Citi strategists said investors\’ positioning in U.S. stocks showed signs of caution, casting doubt on the strength of the S&P 500\’s rally.

Citi strategists said that investors\’ positions in U.S. stocks showed signs of caution, casting doubt on the strength of the S&P 500 index\’s rally.
The recent unwinding of short positions has brought the S&P 500 close to a one-sided net long position, a team led by Chris Montagu wrote in a note. But investors appear hesitant to add further to existing long positions. Decide.
The Nasdaq 100 index, which has a heavy weight in technology stocks, has become net short, even though the index strengthened last week.
Capital flows show limited market enthusiasm. New long positions are trickling in. The increase in risk appetite is also very weak, Montagu said.
The S&P 500 fell for three consecutive weeks last month due to concerns that the Federal Reserve would cut interest rates later than expected. However, it has resumed its gains recently.
After a weak jobs report in April, investors began to believe again that there is a possibility of easing policy this year. The focus now turns to next week\’s inflation report.
We have yet to see significant changes in futures positioning to suggest a substantive change in confidence. Investors appear to be cautiously optimistic at best, Montagu said.
The tepid long positions, coupled with the continuous reduction of long and short positions at the same time, seem to show that investors are moderately optimistic, but at the same time, they are also cautious.

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