Although market watchers were reluctant to declare the bottom of the Wall Street selloff, Citi believes that a number of stocks have now become oversold. Investors should consider buying the dip. The bank’s analysts, led by Hong Li, said that — given the “continued high macro risk and market volatility” — investors should look to Citi’s “oversold strategy,” which they say carries less exposure to macro factors. On June 2, they stated that “The equity market does not follow the volatility in the currency and bond markets because our equity implied elements are moving in opposition to theunderlying macro factors.” The implied 10-year yield is still below 2.7% which continues to support Value over the long-term. We recommend Price Momentum as well our Oversold Strategy for short-term risk mitigation. According to the bank’s oversold strategy, it had produced positive returns in eight consecutive month. Learn more: Wall Street banks call global stocks and industries “fallen angels”: Morgan Stanley recommends that you buy the dip in these global stocks. This is how Wall Street pros trade Wall Street selloffs. Here are the top five attractive oversold stock options. It’s not surprising that a lot of technology stocks appeared on Citi’s list of “attractive and oversold” stocks, which were buy-rated. The list includes two semiconductor stocks — Applied Materials , the world’s largest manufacturer of machinery for manufacturing semiconductors — as well as wafer fabrication equipment supplier Lam Research . The screen also included software company Autodesk and Fidelity National Information Services, a financial technology firm. The tech sector is one of the most affected sectors after years of declining returns. Investors are shifting away from growth stocks and investing in value stocks to avoid the risk of a rate rise cycle. The list also includes several Big Tech companies. Amazon is one of them. It reported lower-than-expected earnings in December and experienced the lowest growth rates since 2001, when the dot.com bust. Amazon shares have fallen 28% in the past year due to a variety of economic problems, such as rising inflation and higher fuel costs. They also face global supply chain issues and ongoing pandemics. The screen also featured Meta, a Facebook parent company that suffered an enormous sell-off. In 2022, nearly half the value of the stock was lost as it struggles to keep up with growing competition and slower growth in its advertising revenues. Citi showed only two financial stocks. Goldman Sachs’ and Capital One Financial shares are currently down around 19% and 16% respectively.
In this illustration, taken on October 28th 2021, a smartphone bearing the Facebook logo can be seen standing in front of the new logo Meta.
Dado Ruvic | Reuters
The brutal Wall Street selloff of this year has eluded market watchers, who have been reluctantly to identify the bottom. CitiThinks that a lot of stocks are oversold now and investors should take the chance to buy them.
