Markets still have 'wood to chop' over the intermediate term, says Citi's Scott Chronert

Summary

• Short-Term vs. Intermediate-Term View: Believes the market has short-term positive momentum due to relief from extreme negative positioning and geopolitical (Iran conflict) risk reduction over the last three weeks.
• Market Bottom Unclear: Argues a classic "flush" with a major volatility spike and high hedging volume hasn't occurred, making it tricky to call a bottom. Current ~5% S&P decline is mid-range of a typical 5-10% corrective phase.
• Intermediate-Term Caution: States the market still has "wood to chop" over the intermediate term, needing about another month for conviction a durable bottom is in place.
• Key Inputs to Monitor: Emphasizes watching oil price trajectory, implications for interest rates and currency, and fundamental corporate performance during the upcoming Q1 reporting period.
• Original 2024 Thesis: His team's view entering the year was predicated on "Goldilocks economics" and a broadening of market leadership away from megacap tech/growth into small and mid-cap sectors.
• Oil Price Focus: Is watching the oil futures curve more closely than ever, as its movement is a critical input for his economic and market outlook.