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US Stocks Have Just Started Pricing In Recession, Citi Quants Say

  • Strategists see more downside risk for US stocks, earnings
  • Barclays’ Cau says 2023 earnings, margin estimates ‘too high’
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US stocks just posted a rare streak of quarterly declines and are in a bear market, but Citigroup Inc. quantitative strategists say they’re only just starting to reflect the risks of a recession.

A team led by Hong Li said equity markets had “turned decidedly defensive” and that they could come under further pressure as they continue to be “heavily driven” by heightened bond market volatility as well as concerns around persistent inflation and a staunchly hawkish Federal Reserve.