Citi Wealth Insights

The first five trading days of January are often perceived as indicative of January equity performance and the overall year’s potential.

Citi analysts believe that the 10-year bull market is not yet over. This is a classic late-cycle bull market, when volatility tends to be higher, as evidenced from the S&P 500 index gaining 6% in 5 days as of 10 January 2019 after falling 9% in December 2018.

Citi analysts believe that “Fear is moving markets, not fundamentals”. Last month’s market correction was the worst December in 7 decades and this suggests a higher probability of a rebound in 2019.

Citi analysts forecast the nine-year bull market is not finished and expect single-digit percentage gains by end-2019. Within equities, Citi prefers Emerging Markets (EM), particularly Asia, and Europe-ex UK.

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