A shift in market positioning is prompting Barclays to take a more constructive short-term view on U.S. equities after months of caution. The bank says lighter investor exposure and easing volatility pressures are creating conditions for a tactical rebound in stocks.
Highlights
- Barclays trading desk has become tactically bullish on U.S. equities for the first time since mid-March, reversing a risk-off stance.
- Barclays' BETI model has issued an equity buy signal, citing a sharp investor pullback and moderation in volatility pressures since late May.
- Barclays' 10-year historical analysis suggests the S&P 500 could rise about 8% over two months, with a 95% historical hit rate for the signal.
Buy signal points to tactical rebound
As reported by Bloomberg, Barclays Plc.'s trading desk has turned tactically bullish on U.S. equities for the first time since mid-March, marking a notable change in its near-term market stance.The bank's Market Timing Indicator, known as BETI, has triggered an equity buy signal after staying mostly in risk-off mode since late May. Barclays traders say the model is now pointing to more favorable conditions for stocks after what they describe as a sharp pullback in investor positioning and a moderation in volatility pressures.
Historical model suggests upside for S&P 500
The latest signal is the first since the Iran war in mid-March that the model has indicated supportive conditions for equities. Based on Barclays' 10-year historical analysis, the S&P 500 is expected to rise about 8% over the following two months.According to the bank's traders, the indicator has delivered a 95% historical hit rate over that period. The call adds a bullish tactical signal from a major bank trading desk at a time when investors are closely watching whether reduced risk aversion can translate into a broader market recovery.
Earlier, we reported on why market volatility can make market timing costly for long-term investors who miss rebound sessions.
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