Citi says US tech stocks are at risk of a major positioning selloff

(Bloomberg) — Investors’ positioning in U.S. technology stocks is so bullish that any sell-off could trigger a broader move, Citigroup Inc. strategists said.

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Bets on declines in the tech-heavy Nasdaq 100 futures have completely disappeared, leaving investors largely expecting further gains. “The major consensus positioning is a risk that could amplify a market turnaround,” strategists led by Chris Montagu wrote in a Feb. 5 note.

U.S. stocks have risen this year, with the S&P 500 hitting a record high for the first time since 2022, on optimism around a stronger-than-expected economy. Positive fourth-quarter results from tech megacaps have also improved sentiment.

Still, investors are becoming more cautious after signals from policymakers that the Federal Reserve may not cut interest rates as early as March. JPMorgan Chase & Co. strategist Marko Kolanovic said Monday that he does not expect monetary easing to begin until mid-year.

Read more: Goldman Sachs’ Rubner says US stock market ‘could fall a lot’

Bullish trends in S&P 500 futures stalled last week, although positioning remains net-long, Montagu said.

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