Investing.com -- The S&P 500 and Nasdaq saw mixed positioning flows over the past week, offsetting any large movements in overall positioning and keeping levels near neutral, Citi strategists said in a report.
“Rather, de-grossing was more prevalent, in particular for Nasdaq which has seen a considerable unwind across long positionings in recent weeks,” strategists led by Chris Montagu said.
“This leaves a much cleaner positioning setup for Nasdaq. For the S&P, long losses remain elevated and could drive further downside pressure,” they added.
Meanwhile, investors remain “firmly bearish” on small-cap stocks.
The S&P 500 closed marginally higher on Friday, snapping a four-week losing streak driven by trade tensions, recession concerns, and weakness in megacap tech. The Nasdaq gained 0.52% to 17,784.05.
For the week, the S&P 500 rose 0.5%, avoiding a fifth straight weekly loss, while the Nasdaq posted a modest 0.2% gain.
Turning to European markets, Citi noted that positioning across European indexes remains bullish, although not extended.
The changes in positioning levels were relatively small, with profit-taking on long positions balanced out by new risk flows. European banks are currently the most bullish sector, but moderate profit levels are keeping profit-taking risks at bay.
In Asia, the Hang Seng and China A50 indexes continued to exhibit high levels of bullish positioning, which remained stable over the week despite mixed flows. Profit-taking activity has helped mitigate some positioning risks in these markets.
Elsewhere, both the KOSPI and S&P/ASX 200 indexes saw more significant changes in positioning, with new risk flows bringing them back to neutral or bullish levels.
U.S. stocks started this week on a strong footing, with the S&P 500 closing at its highest level in more than two weeks on Monday, driven by strong gains in Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA).
The rally followed indications that the Trump administration could adopt a more moderate stance on trade. President Trump said automobile tariffs are on the way but added he may give “a lot of countries” breaks on tariffs, though he offered no specifics.