Markets Edition: A Structural Bull Case for the S&P 500
KEY TAKEAWAYS
- Citi Research outlines a structural bull case for the S&P 500, arguing that the index's increasing concentration in growth-oriented technology, powered by the AI theme, provides a strong foundation for long-term earnings growth.
- The S&P 500's composition has shifted to be more growth-oriented and less economically sensitive. This structural change, combined with AI-driven productivity gains, supports higher valuations and more resilient long-term earnings growth.
- The current AI investment wave, focused on infrastructure “providers,” is expected to broaden to a much wider application of “users,” sustaining long-term earnings growth and profitability across a larger swath of the market.
The Research @ Citi Markets Edition delivers incisive insights into what’s shaping the financial markets today. In this inaugural edition, U.S. equity strategist Scott Chronert explains what underpins his structural bull case for the S&P 500, and why maintaining a longer-term perspective amid cyclical gyrations is especially important now that the market has begun to respond to AI investment.
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Scott Chronert, North America Head of Research, Citi
Scott Chronert is a Managing Director at Citi Research serving several roles, including US Equity Strategist, Global Head of ETF Strategy & Analysis, and US Small/Mid Cap strategy. Scott assumed the US Equity Strategy role at Citi in October 2021. He brings a fundamental approach to assess the US equity landscape. Regarding ETFs, Scott and his team have been at the forefront of sell-side, institutional grade, analysis of the ETF ecosystem since 2012. His product covers all facets of ETFs, including broader industry trends, flow analysis, stock and market impacts, complemented with positioning views covering most asset classes and geographies. His work on US Small/Mid Cap provides a blend of top-down and stock-specific insight. Scott also contributes to Citi’s global equity strategy product. Prior to joining Citi Research in 2010, Scott spent more than 25 years in Institutional Equity Sales and Management roles (mostly at Citi). Citi was named Global ETF Research Provider of the Year 2019 by ETF express. Scott is a graduate of Dartmouth College, AB degree 1978 and UCLA Graduate School of Management, MBA degree 1980.
