Lates News

With the easing of trade tensions, the two major trading departments on Wall Street have made similarly bold predictions for the US stock market: buying a large amount of the worst-performing stocks this year can quickly generate short-term profits. The stock trading departments of Citigroup and JPMorgan both stated that they are bullish on small-cap stocks, tech hardware, and home construction stocks in the coming weeks, as these sectors have all lagged behind the S&P 500 index in the recent rally. Stuart Kaiser, head of Citigroup's US stock trading strategy, also expressed optimism for stocks of companies with weaker financial conditions in the current environment. "Systematic traders and discretionary investors will see significant buying pressure as they have not been able to achieve ideal returns in this rebound," Kaiser said. "Currently, they are underinvested and have a large amount of funds available to buy these lagging sectors." Andrew Tyler, head of global market intelligence at JPMorgan's trading department, stated that it makes sense to purchase stocks of industries that have been hard hit (such as retail or consumer discretionary) through derivatives, as these industries may experience short-covering in the short term. This occurs when traders hold short positions in stocks while the prices sharply rise, forcing them to quickly buy back the stocks to cut their losses.