Citi strategist: U.S. stocks will soon plunge

Citigroup strategists said the decline in capital inflows and the downgrade of growth expectations suggest that the U.S. stock market will soon be heading for a plunge. The firm recently raised its year-end target for the S&P 500 to 5,600, but said in a client note on Friday, represented by Scott Chronert, that "short-term trends have us prepared for a correction." The report noted that capital flows have slowed, internal sentiment indicators are at "excited" levels, and Citi's forecast is that there will be a recession in the second half of this year. At the same time, the general growth expectations have declined recently. All of this has prepared the stock market for a "summer storm" or "sudden strong winds," Citi strategists said. In addition, election volatility remains an uncertain factor, and both parties are likely to face fundamental pressures. (Jinshi)