Keep buying the dip as market gains broaden beyond ‘Magnificent Seven,’ Citi says

Thu, 20 Feb 2025 14:11:33 GMT

Market volatility will persist, but Citi thinks these for now will only be buying opportunities. “We continue to expect ongoing bouts of volatility, keeping us in ‘buy pullbacks’ mode,” strategist Scott Chronert wrote to clients. The S & P 500 hit a fresh record on Wednesday, but the path back to all-time highs hasn’t been a smooth one. The broad market index fell as much as 1.9% on Feb. 3 after President Donald Trump unveiled new tariffs on goods from Mexico and Canada. The benchmark ended the day well off those lows as the levies were quickly halted for one month. On Jan. 27, the S & P 500 lost 1.5% after the emergence of artificial intelligence model DeepSeek put pressure on high-flying tech names such as Nvidia. .SPX YTD mountain SPX year to date Still, the market has remained resilient. Chronert pointed to gains broadening beyond the so-called Magnificent Seven, the tech giant cohort that has driven stocks higher over the past few years. “We’re getting the broadening effect expected, but it is most notable within large cap as the mega cap Top 50 is no longer outperforming the remainder of the index. Of the Mag 7, only META has notably outperformed. Our narrative had been that the S & P 500 needs the Mag 7 to contribute, but not necessarily lead,” he said. Chronert has a year-end S & P 500 target of 6,500. That implies upside of 5.8% from Wednesday’s close. “All told, there is no change to our full year expectation for equities,” he said. “At this point, we see some modest downside risk to our and consensus estimates as the Trump policy platform unfolds. This should be manageable so long as the implication is for solid growth follow through into ’26 and beyond. In the meantime, broadening is happening within US large cap.” Elsewhere Thursday morning on Wall Street, Loop Capital initiated Palantir with a buy rating, calling for more than 25% upside. “While we usually don’t recommend paying 44x sales for software companies, we believe Palantir has all the hallmarks (i.e., massive market, category leader, strong execution) of becoming a game-changing software stock along the same lines as Adobe in digital marketing and salesforce.com in cloud,” analyst Mark Schappel said in a note to clients.

原文链接：https://www.cnbc.com/2025/02/20/keep-buying-the-dip-as-market-gains-broaden-beyond-magnificent-seven-citi-says.html