Citigroup strategists mentioned Tuesday that US shares have the scope for an additional rally as indicators level in direction of sustained curiosity in riskier investments, and present market positions aren’t thought-about overly prolonged.
The strategists noticed a dip in investor optimism mid-March however famous a resurgence in funding flows over the past week.
Traders added $16 billion in new lengthy positions on S&P 500 futures final week, whereas the exchange-traded funds (ETFs) registered web inflows.
Moreover, they identified that market positions aren’t traditionally overextended, which helps the potential for continued optimistic market tendencies.
“Positioning shouldn’t be stretched relative to historical past, which means the present pattern can proceed within the coming weeks.”
Elsewhere, the strategists noticed enhancements in European market sentiment over latest weeks, with positioning within the Euro Stoxx 50 displaying a barely extra bullish stance in comparison with the U.S. market.
“The optimistic sentiment continued with over $2bn new longs up to now week and ETF inflows,” the group highlighted.
In China, the investor sentiment was extra divided, with the Dangle Seng seen bearishly at -1.1, whereas FTSE China A50 enjoys a bullish outlook at +1.8. The A50 has gained optimistic momentum just lately and persistently over the previous month.