Barclays’ team of strategists sees enough room for a broader stocks rally, particularly if the economy manages a soft landing. This is despite the massive gains in the equity market in recent months.
As a result, inventory positioning is not too extensive outside the U. S. This is an increase in the U. S. and generation sectors, indicating prospects for expansion into other areas.
Strategists recommend that, despite the strong recent performance, stocks are likely to take a short break, but the “buy on dips” mentality is likely to triumph again. This is even more likely if fair allocations from retail and mutual budget investors are maintained. not excessive.
Overall equity sentiment was higher in January, with CTAs (Commodity Trading Advisors) quite long. In addition, the macro hedging budget and risk budget have also increased their exposure, which can magnify market pullbacks in the event of adverse events.
There is still a significant amount of cash left in spot markets, which could potentially be invested in riskier assets as the economic expansion picks up and interest rate cuts are expected to begin more aggressively in the second half of the year.
The risk-taking trend observed has been concentrated in U. S. stocks. and generation, and Japan has also seen a lot of interest. However, China and Europe were not as favoured, with long budgets and systematic methods remaining underweight in those regions.
By sector, European cyclical stocks such as luxury, automotive, mining, chemicals, banks, and energy are not saturated, presenting potential opportunities for investors to diversify their portfolios.
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