Citi cuts U.S equities with exceptionalism ‘at least pausing’

Citi strategists downgraded U.S equities to neutral from overweight, which it had been since October 2023, while upgrading China to overweight from neutral. U.S. “exceptionalism is at least pausing,” the strategists tell investors in a research note. The firm believes the news flow from the U.S. economy is likely to undershoot the rest of the world in coming months. “At least tactically, U.S. exceptionalism is therefore unlikely to roar back,” Citi predicts. It thinks China stocks screen well, even after the recent rally.