Barclays is looking for continued gains in US equities into the new year but are cautious near term. From a Wednesday (US time) note from analyst at the firm, in summary:
- lower rates in November have helped boost flows into equities, long-duration assets generally.
- growth stocks in technology and cyclical in particular have befitted
- buying from numerous tranches of investors: long-only, retail investors, real money, along with those covering shorts
The analysts sound a cautionary tone in the near term:
- Rally looks exhausted
However:
- overall equity exposure is only about neutral
- cash holdings are high
- (a soft landing feels to be the consensus, and with poor returns by mutual funds in November it suggests that) positioning is defensive and pain trade remains to the upside into 2024
- Aggregate equity positioning still looks marginally below neutral
- discretionary investors holding lower equity exposure compared with systematic peers
