Citi Wealth says a deeper stock-market correction this year would have created a better buying opportunity for equities. Speaking to CNBC, Jeanne Sun, head of portfolio advisory at Citi Wealth, said the firm “wouldn't have minded a little bit more of a correction” because the market’s underlying fundamentals remain strong.
Sun said resilient corporate earnings growth continues to underpin stocks. She added that the pullbacks and corrections seen this year have been “amazingly shallow,” while a larger decline, in Citi Wealth’s view, could have offered a more attractive entry point for investors.
Citi Wealth serves clients across the spectrum, from ultra-high-net-worth individuals and family offices to mass-affluent investors and professionals, and manages more than $1 trillion in client balances globally. Heading into the fourth quarter, the business is still biased toward equities despite higher interest rates and elevated Treasury yields.
According to Sun, the rise in rates has been driven more by real rates than by inflation expectations, which she sees as a sign of underlying U.S. economic strength. As long as strong growth and earnings continue to support companies, she said, higher borrowing costs do not necessarily outweigh those benefits.
She cautioned that volatility could persist into October amid uncertainty over monetary policy and the U.S. midterm elections. For now, however, Citi Wealth is not seeing signs that higher rates are materially weakening demand or corporate profits, even though elevated investor expectations may raise near-term market risks.
