Citi moved its ratings on U.S. and technology equities to neutral on Nov. 9 and raised European equities outside the U.K. to overweight, citing the region’s lower technology exposure.
The bank tied its preference for European shares to their smaller technology exposure and the possibility that lower oil prices could provide support.
Citi still views artificial intelligence favorably over the medium term. Before taking a bullish stance again, it wants investor sentiment and earnings expectations to become more stable.
The bank also said the Nasdaq could fall another 5% before investors’ positioning signals a clear bearish turn.
