The S & P 500 ‘s recent rally has many investors convinced the bear market is drawing to a close, but Citi’s Scott Chronert isn’t convinced. The broad market index has surpassed the key 4,300 threshold in recent days, rallying more than 20% off its October low. Chronert, U.S. equity strategist at Citi, isn’t buying the rally. He is maintaining his full-year S & P 500 target of 4,000 as he forecasts a pullback in the second half of 2023. “As easy as it would be to follow the tape higher, our instinct is that the AI/Growth move needs to be digested, while recession risk remains high,” the strategist wrote in a Monday note. “The euphoria around AI [has] driven the growth component of the market. … This is relative to the cyclical side of the market, which is down 2%, [and] defensives down 4% to 5%. So, this is not a broader market move. This is a very narrow move,” he said Tuesday on CNBC’s ” Squawk on the Street .” Citi isn’t the only Wall Street firm that expects a market pullback later this year. According to CNBC Pro’s Market Strategist Survey , Barclays, Morgan Stanley and UBS are forecasting the broad market index to fall below 4,000 at year-end. Chronert anticipates the market to take an upward trajectory in the first half of next year. His base case for the S & P 500 forecasts a mid-year 2024 target of 4,400. “In essence, we think a more substantive bull case centers around a classic soft-landing scenario, wherein the Fed pivots as inflation falls without further tightening while economic activity in the U.S. and globally averts traditional recession definitions,” Chronert wrote in the note. — CNBC’s Michael Bloom contributed to this report.
Citi is not buying the market breakout, says S&P 500 to retreat back to 4,000