According to Odaily Planet Daily, Citigroup strategists said that the decline in capital inflows and the downward revision of growth expectations indicate that the US stock market will soon plunge. The company recently raised its year-end target for the S&P 500 index to 5,600 points, but said in a client report represented by Scott Chronert on Friday that "short-term trends prepare us for a correction."
The report noted that fund flows have slowed, internal sentiment indicators are at "excited" levels, and Citi's forecast is for a recession in the second half of this year. At the same time, consensus growth expectations have declined recently. All of this has left the stock market ready for a "summer squall" or "sudden strong winds," Citi strategists said. In addition, election volatility remains a wild card, and both parties are likely to face fundamental pressures.
