(BFW) Citi Cuts U.S. Equities to Underweight, Favors Europe, Japan

Citi equity strategists say they are not especially bearish on U.S. stocks, but can see better opportunities elsewhere, according to note.
  • “After outperforming for six consecutive years, maybe U.S. equities are due a breather”
  • Corporate profit margins likely to be under some pressure as Fed raises rates; however, sentiment is subdued and valuations supportive; 1H looks more promising than 2H
  • Citi prefers Europe ex U.K., Japan, citing “decent” EPS momentum, continued central bank support
  • Citi forecasts 12% gain for global equities in 2016
    • “We see this global bull market as tired and old, but not finished”: Citi