Citi Wealth's chief investment officer, Kate Moore, indicated that global markets may be entering a phase of consolidation following a significant rally in equities, despite a generally positive long-term outlook for stocks.
During an interview with CNBC at the Citi Pan Asia Conference, Moore noted that markets have shown resilience beyond investor expectations, even amid ongoing concerns related to the Middle East conflict, persistent inflation, and crowded investor positioning.
She highlighted that recent market focus has been on strong earnings reports and increased spending expectations from companies, which have contributed to a positive market sentiment. The MSCI World Index, which tracks large and mid-cap stocks in developed markets, is currently at record highs, having risen over 13% since its March lows.
Notable performances from companies like Microsoft and Amazon, which reported better-than-expected earnings and revenue, have bolstered this rally. Moore anticipates that equities will finish the year higher, suggesting that any short-term pullbacks, possibly due to a more aggressive Federal Reserve, could offer buying opportunities.
However, she warned that investors might be underestimating risks as they look towards the second half of the year, particularly concerning geopolitical tensions in the Middle East and broader inflationary pressures that may not be fully accounted for in current market expectations. Additionally, she mentioned potential political and policy volatility in 2026 that could impact asset prices.
This commentary underscores the delicate balance investors must navigate between current market strength and emerging risks