Investing.com -- U.S. equity positioning has remained stable last week despite consecutive weeks of losses, according to Citi strategists led by Chris Montagu.
The S&P 500 index has seen a quicker reduction in bullish positioning compared to the Nasdaq, Citi notes, with long position losses increasing across all U.S. indexes, adding to further downside risks.
Montagu and his team highlight the resilience of the S&P 500 and Nasdaq, given the sharp market downturn last week.
“For both the S&P and Nasdaq, offsetting short positioning flows throughout the week nullified any significant change in positioning levels,” the strategists noted.
“Both markets are net long, but neither are currently extended, and Russell 2000 bearish positioning is rising,” they added.
The growing losses in long positions across various indexes are particularly pronounced for the Nasdaq.
By contrast, European markets have not seen meaningful changes in investor positioning, even with positive defense spending announcements, except for a moderate increase in the DAX index.
The Euro Stoxx and DAX remain moderately bullish, but the FTSE 100 has seen a growing bearish outlook among investors in recent weeks.
Elsewhere, Asia’s Hang Seng and China A50 indexes maintain bullish positions despite increased U.S.-China tariff tensions.
But other major Asian indexes, including Nikkei, KOSPI and S&P/ASX 200 “saw declining positioning levels as new short positioning flows dominated weekly activity,” the strategists said.
“Risks are elevated for Hang Seng, where positioning is one-sided bullish and long positions are currently deeply in profit,” they added.