By Sam Boughedda
In a note to clients Tuesday, Citi analysts said the bullish momentum in equity markets is fading.
Over the past week, the analysts state that there was a limited direction to investor flows, with a mixture of bullish and bearish daily flows "largely netted out in the end."
"Markets split into bullish and bearish groups in January, but recent activity indicates that momentum has diminished out of the bullish markets," the analysts wrote. "The one exception is European Banks where futures positioning has been at historical record levels for weeks and continues to extend."
Furthermore, U.S. ETFs have had two consecutive weeks of outflows, according to analysts, leaving positioning marginally net bullish but with momentum slowing.
Elsewhere on Tuesday, BofA analysts told investors in a note that there were muted outflows last week, while for the first time in 2023, clients sold single stocks and bought ETFs.
"Overall this year, we have a seen a record spread (since at least' 08) between single stock inflows vs. ETF outflows," analysts wrote. "In a year of crosscurrents, we expect a shift in focus from macro to micro and from passive to active."
BofA's institutional and hedge fund clients were both net sellers after buying the prior week, added analysts, with the firm's private clients small net buyers for the first time in three weeks.