What do Citi analysts tell investors?
2022.11.18 10:24
What do Citi analysts tell investors?
Budrigannews.com – Citi analysts told investors they should not follow the UST.
Analysts explained that the rise in risk assets could continue until at least mid-month central bank meetings.
“The pressure on the central bear market is -18% from trough to peak, and SPX would be 4150 if it is realized this time. In addition, throughout the year, 12m fwd PE could not exceed 1y MA. A similar outbreak occurred in 1994, when the Federal Reserve was rapidly strengthening. The 12m fwd PE will have a 1y MA of 〜18x, which is index230 for the current EPS estimate and infers an index level of -4140. From a price point of view, this is below the summer high – 4330, so for Dow theorists, low highs at the index level keep the bear market intact,” the analysts wrote.
Despite the recent rally, Citi has maintained the base case of a hard landing next year, but the company believes that chasing bond yields will be more difficult compared to stocks.
“The gap between revenue yield and bond yield (EYG) is small now. The risk rewards of chasing stocks (compared to chasing bonds) are not stacked up, especially if you think a recession is going on. We demonstrate this by bucket EYG and looking at the forward returns of SPX and UST. The latter is buy as screen. We bought Ust last week and still like trade,” the analyst concluded.
