Citigroup raises the S&P 500 index target to 6,600 by the end of the year, reflecting expectations of a market correction in the near future.

The move to increase the target accompanies a rise in demand for short-selling derivative products from asset managers, indicating that investors are being cautious about credit risk and may be preparing to cope with adjustments in the stock market.

MAIN CONTENT

  • Citigroup raises the S&P 500 target from 6,300 to 6,600 this year.

  • There are signs of increased demand for short-selling derivative products from asset management clients.

  • Investors are hedging credit risk and expecting a market correction in the next quarter.

What does Citigroup forecast for the S&P 500 at the end of 2024?

Citigroup has raised its target for the S&P 500 index to 6,600 points by the end of 2024, up from a previous forecast of 6,300 points. This is a positive signal for the market outlook, which still has significant potential for growth according to the bank's assessment.

The new targets are based on current market analyses and trends, where Citigroup sees many attractive investment opportunities but also notes potential risks, especially from the risk hedging signals of asset managers.

What factors are driving the increase in demand for short-selling derivatives in the market?

Stuart Kaiser, head of options strategy at Citigroup, noted a surge in demand from asset management clients for derivative products used to short iShares indices or junk bond benchmarks.

This indicates that large investors may forecast adjustments in the market or use these products to hedge risks in case risky assets decline. Credit hedging is being emphasized, showing that investors assess the likelihood of volatility in the coming months.

“Hedging credit risk with derivative products shows that every professional investor is preparing for a reasonable correction in the stock market within the next three months.”

Stuart Kaiser, Head of U.S. Options Strategy, Citigroup, August 2024

What is the significance of hedging credit risk for the stock market?

Hedging credit risk often reflects a cautious outlook on financial prospects, especially when risky assets like stocks and subprime bonds show signs of volatility.

As asset management funds ramp up short-selling of risk-related credit indices, this indicates they expect price corrections or declines in the stock market, thus preparing more effective capital protection strategies.

If any, a comparison table of the forecasted S&P 500 index targets for 2024

Unit Old Target New Target S&P 500 Index (points) 6,300 6,600

Frequently Asked Questions

Where does Citigroup forecast the S&P 500 index in 2024?

Citigroup raises the S&P 500 target to 6,600 points, reflecting expectations that the market still has potential for price increases.

Why has the demand for short-selling derivative products surged?

Because asset managers want to hedge credit risk and prepare for the potential market correction.

How does hedging credit risk affect the stock market?

Typically, it indicates expectations of a correction or volatility in stock prices and risky assets.

What does the change in forecast targets mean for investors?

Investors need to be more cautious in their strategies, combining growth opportunities with risk hedging when the market is volatile.

How long is the market correction expected to last?

Citigroup experts forecast that this could occur within the next three months.

Source: https://tintucbitcoin.com/citigroup-dieu-chinh-muc-tieu-sp-500/

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