Citi Warns of Rising ‘Unwind Risks’ for Stocks

Citi cautions that the recent post-election optimism among investors may put the market at risk of a short-term pullback. In a client note, Citi’s quantitative research team highlighted that stock market positioning is currently “extended,” raising the risk of a potential unwind for both the S&P 500 and Russell 2000.

“S&P positioning is at its highest level in three years, with similarly stretched positioning across the Nasdaq and Russell 2000,” the note stated. “Profits remain elevated for both the S&P and Russell, which could trigger near-term profit-taking and limit further upside.”

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