Global Equity Quarterly: Back to the Broadening Debate

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Global Equity Quarterly: Back to the Broadening Debate

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10 Jul 2026 18:00:00 ET │ 33 pages

Global Equity Quarterly

Back to the Broadening Debate

CITI'S TAKE

Global/European Equity Strategy

Global equities have climbed c10% YTD, though leadership has been

concentrated into Tech. With geopolitical risks easing (until recently) and Beata M Manthey, Ph.D. AC

signs of rotation away from crowded AI trades, many of our conversations are +44-20-7986-4349

returning to the likelihood of “broadening” performance in 2H26. The success beata.manthey@citi.com

of broadening relies on: (1) sustained cyclical improvement in macro/EPS

revisions, and (2) a sustained pause in Tech outperformance. On cyclical David Groman AC

recovery, we are encouraged by upside surprises in economic data and more +44-20-7986-4346

broad-based EPS upgrades. However, Tech continues to screen highly in our david.groman@citi.com

models, supported by standout earnings growth/momentum and attractive AC Nikhil N Jadhav, CFAvaluations. While AI volatility may remain elevated over the coming quarter,

we maintain our Overweight stance on global IT and the US with a medium- +44-20-7508-0895

term view. We pair these Growth exposures with O/Ws in Cyclical nikhil.nitin.jadhav@citi.com

regions/sectors (Japan, Financials, Materials). We remain broadly USconstructive on equities, targeting c6% upside for the MSCI ACWI to end-26.

Scott T Chronert AC

1H26 Recap: Bumpy Climb — After a standout year for equities in ‘25, the global +1-415-951-1771

benchmark has followed a similar path higher this year. Geopolitics and shifting scott.t.chronert@citi.com

sentiment on AI have been key sources of volatility, and risks remain two-sided. For