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Citigroup Inc.Citi: Global Equity Positioning Turns More Defensive as Bearish Flows Return
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Global equity positioning weakened further last week as investors turned more defensive and bearish flows re-emerged across major markets, according to Citi analysts in a note Tuesday. The bank said renewed short-selling across the U.S., Europe and parts of Asia drove a broad-based deterioration in sentiment, and while positioning remains largely neutral across most indices, underlying profit-and-loss conditions have become increasingly fragile. Citi flagged the Russell 2000 and DAX as markets where loss-making positions have accumulated rapidly, warning this raises the risk of further de-grossing and position unwinds. In the U.S., positioning weakened as investors added bearish exposure in both the S&P 500 and Russell 2000, with new shorts dominating flows, while Nasdaq positioning was comparatively resilient and near unchanged; position risk is most concerning for the Russell 2000, where Citi said all longs are currently loss-making and aggregate investor profit and loss is declining rapidly. In Europe, positioning deteriorated as investors cut risk across most indices, with new shorts dominating flows in the DAX, FTSE 100 and European banks, though the Euro Stoxx 50 was an exception, remaining relatively resilient as meaningful short covering more than offset broader regional de-risking.
Citigroup Inc.