Citigroup Downgrades U.S. Stock Market Rating to Neutral Citing Diversification Needs

Citigroup has downgraded its rating on the U.S. stock market from overweight to neutral. This decision comes as recent events, including DeepSeek, the European fiscal stance, and trade tensions, have strengthened the view that investments should be diversified outside the U.S. market. According to Citigroup strategists, the driving factors behind the 'exception theory' are fading when viewed from a GDP and EPS perspective. The bank also noted that the U.S. market remains relatively expensive, and the trend of EPS downgrades is intensifying.

Beata Manthey, a Citigroup stock strategist, along with other strategists at the bank, has cited several reasons for the downgrade. The recent events have led to a shift in the bank's perspective on the U.S. market. The bank's strategists believe that the U.S. market is no longer as attractive as it once was, and investors should consider diversifying their portfolios to include other markets. The bank's strategists also noted that the U.S. market is relatively expensive compared to other markets, and the trend of EPS downgrades is intensifying.

Citigroup's downgrade of the U.S. stock market rating is a significant development in the financial world. The bank's strategists have cited several reasons for the downgrade, including recent events, the fading of the 'exception theory,' and the relatively high cost of the U.S. market. The bank's strategists also noted that the trend of EPS downgrades is intensifying, which could further impact the U.S. market. Investors should consider diversifying their portfolios to include other markets, as the U.S. market may no longer be as attractive as it once was.