Buy the Dip in Global Stocks on Policy Support, Citigroup Says
A resurgence in Covid-19 cases, earnings downgrades, and a chaotic U.S. election may all drag on stocks in the coming months.
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Citigroup Inc. strategists are worried about a whole host of threats to equities, but still recommend investors buy the dip. They expect central banks to step in if risks mount.
A resurgence in Covid-19 cases, earnings downgrades, a chaotic U.S. election and stretched valuations may all drag on stocks in the coming months, but any market weakness is likely to provoke “aggressive” policy actions, strategists led by Robert Buckland wrote in a note. They forecast “mild gains” for global equities, predicting the MSCI ACWI Local Index will rise to 705 by mid-2021, or 7.5% from Friday’s close.