In a new report, Citigroup (C) says that short sellers who bet against the U.S. stock market are giving up as the benchmark S&P 500 index continues to hit record highs.
Analyst Chris Montagu says that short sellers are capitulating as the S&P 500 is up 27% and headed for its best year since 2021. Montagu notes that options bets related to the S&P 500 have become “completely one-sided” and focus on bullish calls that expect U.S. stocks to continue rising.
“Dollar net positioning continues to set new highs indicating continued flow momentum chasing the ongoing rally in S&P,” he wrote in a note to clients. “Increasingly the hold-out shorts are capitulating,” he added.
U.S. Rally Likely to Continue
Appetite for U.S. stock shows no signs of cooling off. The S&P 500 has made more than 50 record highs this year and the rally in equities has only accelerated following the re-election of Donald Trump on November 5, leading to hopes of tax cuts and greater deregulation.
Analysts, traders and economists appear to agree that U.S. stocks are likely to rise further in 2025. It was recently reported that every major bank and brokerage on Wall Street expects U.S. markets to continue rallying throughout next year, propelled higher by falling interest rates, strong corporate earnings, and economic strength.
The stock of Citigroup has risen 43% this year.
Is Citigroup Stock a Buy?
Citigroup stock has a consensus Moderate Buy rating among 17 Wall Street analysts. That rating is based on 11 Buy and six Hold recommendations assigned in the last three months. The average C price target of $76.32 implies 7.30% upside from current levels.
