Time: 2024-07-22
In a recent report , Citigroup analysts predicted that the S&P 500 index would continue to see gains in the second half of 2024 , although at a slower pace than the first half . Despite concerns about a potential recession , the analysts remain optimistic due to investments in generative AI , which have helped balance out traditional macroeconomic worries . The bank highlighted the performance of the " Mag 7 , " a group of top tech companies including NVIDIA , which has contributed significantly to the index 's gains this year.
On the international front , Citigroup strategists have reduced equity risk while maintaining a positive outlook on U.S. stocks . The bank cited potential risks from tariffs as a reason for reducing international exposure , notably taking profits in Japan and adding an underweight position in the EU . Despite these adjustments , the strategists believe that equities still have room to grow in the long term.
The recent rotation from large - cap to small - cap stocks has not deterred Citi strategists from the AI large - cap trade , as they believe it will not have a negative impact on the overall market . They anticipate continued outperformance of U.S. stocks , noting that tariff risks could affect other countries more than the U.S. , even under a Trump administration . Chinese equities have seen the most significant selloff due to aggressive tariffs , while Japan , the EU , and Korea have also been impacted but to a lesser extent.
In conclusion , Citigroup 's analysis points towards a positive outlook for the S&P 500 and U.S. stocks in the coming months , with potential growth drivers in the tech sector and broader market . Despite global economic uncertainties , the bank remains confident in the resilience of the market and the potential for continued gains in the near future.
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