Citigroup says buy the dip in tech stocks
Citi isn't shying away from tech stocks. "Last quarter, we took profits on our US and Global Tech Overweights, but suggested buying dips," Citi strategists wrote in a Friday note. "We have now seen a meaningful pullback and thus upgrade global Tech once again." Tech stocks have been under pressure recently as Treasury yields rise to multiyear highs, making growth-oriented tech names less attractive. The Nasdaq Composite alone shed 5.8% in September and reached its lowest level since May last month. The S & P 500 tech sector is also down more than 5% in the past month. .IXIC YTD mountain Nasdaq Composite year-to-date performance With a preference for Europe and emerging markets, Citi reiterated its overweight rating on the regions. It has a neutral stance on the U.S. and Japan and is underweight on Australia and the United Kingdom. "We continue to prefer Europe and EM over the US, as increased chances of a US soft landing (at least for now) and stabilizing Chinese growth should support Cyclical markets," the note said. "Our global sector allocation now has a clear Cyclical tilt, from a previous barbell approach." Citi added that the overall risk to the global economy is skewing "more balanced," and the firm forecasts an earnings slowdown before the end of 2023 instead of an outright recession. — CNBC's Michael Bloom contributed to this report.