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Citi strategists recommend taking a profit in US shares and buying China shares.
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America’s economic lead has been dulled under Trump, which influences consumer sentiment and share performance.
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The technical advances and favorable valuations of China make the shares of the country attractive despite tariff risks.
A break in the US Exceptionalism suggests that it is now time to take a profit in US shares and shares of companies in China, said Citi Strategen in a Monday memorandum.
The bank has reduced US shares to “neutral” and raised China shares to “overweight” that Wall Street wiped in recent weeks: America’s economic lead has divested in the opening days of the second Trump administration.
Tarief policy and radical dismissals from federal employees have turned out to be consumer sentiment to such a extent that management teams have warned about an imminent growth slowdown in economic Bell Laws such as Delta Air Lines.
“This can be the last strong employment report, because DOGE cuts, voluntary dismissal and the weaker economy come into effect,” said the strategists, led by Dirk Willer, referring to the February work report published last Friday.
Now that investors in Rosier growth prospects for Europe and then, proven by their stock markets that are rising to register highlights, while the S&P 500 Boters.
For CITI strategists, the decrease of almost 10% in the US stock market is a good reason to take a profit.
“After entering a bubble area, we are more watchful in protecting profit,” said Willer.
The recent downward violation of the 200 -day advancing average of the S&P 500 and the inability of the “beautiful 7” stocks to catch an offer were two bearish signals that were too large for Willer to ignore.
“When 4 out of 7 ‘generals’ fade, for at least 5 days, during bubbles, this is also a warning signal,” Willer explained.
Willer said that the American AI trade would bounce back in the long term, but it will probably struggle for the next three to six months.
“In the larger whole we doubt that the AI bubble has already been completely played, and we would expect that the US will remain one of the leaders, perhaps together with China, while the AI theme is intact,” Willer said. “But for the reasons mentioned above, we believe that this is unlikely that this is the right picture today, because we expect more negative American data prints.”
With regard to Willer’s upgrade of China shares, the strategist emphasized the technological breakthrough of Deepseek as proof that the technology of the country is “on the Western technological border (or beyond).”
