Stocks will present a buying opportunity amid selloff, says Citi's Scott Chronert

Summary

Scott Chronert, Citi's U.S. equity strategist, says recent market volatility from Japanese bonds and European geopolitical headlines is creating a buying opportunity rather than derailing a constructive U.S. equity outlook. He reiterates Citi's 7700 S&P 500 target, tied to 320 index EPS and a Q4 beat-and-raise cycle, while monitoring Treasury yields. He also remains positive on the small- and mid-cap pivot, citing upcoming fiscal stimulus as a tailwind, though materially higher 10-year yields would force a rethink.

• Citi's Scott Chronert remains constructive on U.S. equities and expects a buying opportunity amid the selloff.
• S&P 500 target of 7700 rests on 320 index EPS and Q4 beat-and-raise.
• Japanese bond moves and Europe/Greenland headlines are macro risks being monitored.
• Bond market vigilante and U.S. deficit math are on watch.
• Citi had expected lower 10-year Treasury yields and fewer policy distractions.
• Small- and mid-cap pivot is still early innings, with fiscal stimulus seen as a tailwind.
• Higher 10-year yields would require a rethink of the small/mid-cap view.