Citi's equity markets positioning model points to bullish positioning intensifying for US large caps as Europe stabilises

Citi says bullish positioning in US large caps has intensified into increasingly stretched territory, with legacy short exposures in the S&P 500 leaving scope for further upside via covering, while profit-taking risk is rising in the Nasdaq given elevated P&L levels. European flows have turned more constructive with renewed long flows to EuroStoxx, DAX and FTSE, though EuroStoxx remains net short with limited conviction. KOSPI positioning remains the most extended globally, raising mean-reversion risk, while China A50 has seen steady improvement in bullish positioning.