Citi Market Insights

Rising readings on the MOVE Index, which tracks interest rate volatility, have historically coincided with weaker MBS returns.

“Rising readings on the MOVE Index, which tracks interest rate volatility, have historically coincided with weaker MBS returns.”

Rolling 65-day ETF flows into Japan remain nearly flat as a share of assets under management.

“Rolling 65-day ETF flows into Japan remain near flat as a share of assets under management, well below prior peaks in investor enthusiasm, leaving ample room for further participation.”

The S&P 500’s price-to-earnings multiple is in the 29th percentile since 2020.

“As real yields have risen, valuations have compressed, leaving the S&P 500’s price-to-earnings multiple in the 29th percentile since 2020, while earnings growth sits in the 89th percentile.”

Agency mortgage-backed securities (MBS) spreads stand at 37 basis points, near the tight end of their range since 1990, as of September 25, 2026.

“However, agency MBS spreads stand at 37 basis points, near the tight end of their range since 1990, which we believe limits the potential for further price appreciation (Figure 3).”

The long-term average ratio of earnings upgrades to downgrades across MSCI Japan is approximately 1.0.

“Across MSCI Japan, upgrades now outnumber downgrades by 2.6 to 1 on a three-month rolling basis, well above the long-term average of roughly 1.0 (Figure 2).”

Japanese corporate profits have reached 22% of output, marking a multi-decade high in data extending back to 1970.

“Japanese corporate profits have climbed to 22% of output, a multi-decade high in data going back to 1970.”

The S&P 500 leads major regions in year-to-date revisions to next-12-month earnings at 29.2%.

“The S&P 500 leads major regions in year-to-date revisions to next-12-month earnings at 29.2%, and it posts the highest interest coverage ratio at 9.4x.”

The S&P 500 posts the highest interest coverage ratio at 9.4x.

“The S&P 500 leads major regions in year-to-date revisions to next-12-month earnings at 29.2%, and it posts the highest interest coverage ratio at 9.4x.”

Over the past month, large caps outperformed small caps by more than 6.5% as of September 2026.

“Over the past month, large caps outperformed small caps by more than 6.5%.”

40% of enterprise users have installed AI-powered browser extensions.

“Industry data shows how quickly this surface is growing. 40% of enterprise users have installed AI-powered browser extensions, and 64% of those extensions can access sensitive internal data.”

AI bot traffic grew 300% year over year in 2025.

“AI bot traffic grew 300% year over year in 2025, while daily API attacks rose 113%.”

Citi's Global Investment Council increased equity exposure in areas with strong earnings and secular demand during the week of September 22, 2026.

“Last week, our Global Investment Council selectively increased equity exposure where earnings and secular demand look strongest.”

Daily API attacks rose 113% in 2025.

“AI bot traffic grew 300% year over year in 2025, while daily API attacks rose 113%.”

Security spending for AI systems is expected to grow five times faster than overall cybersecurity.

“AI security spending is expected to grow roughly five times faster than overall cybersecurity, creating a durable investment opportunity without betting on a single AI model or platform.”

Among the ten largest companies in the S&P 500, gross margins rose from 47% in 1995 to 58% as of September 2026, and EBITDA margins climbed from 21% to nearly 40%.

“Among the ten largest companies in the S&P 500, gross margins have risen from 47% in 1995 to 58% today, and EBITDA margins have climbed from 21% to nearly 40%.”

Citi Market Insights advises investors to favor high-quality assets, keep bond duration short, and take risk in equities rather than reaching for spread.

“We favor staying up in quality, keeping duration short at the front end of the curve, and taking risk in equities instead of reaching for spread.”

Citi Market Insights' prediction of small-cap stock underperformance had not materialized as of September 2026.

“Our call for small-cap underperformance has not played out this year, but we believe any further tightening in financial conditions would weigh more on small caps than on large caps.”

In the year leading up to September 2026, the S&P 500's forward price-to-earnings ratio declined while the U.S. five-year real yield rose.

“Over the past year, the S&P 500 forward P/E has declined as the U.S. five-year real yield has risen.”

Since their post-COVID peaks up to September 2026, forward price-to-earnings multiples have fallen in major regions, but global equities have delivered strong performance due to rapid earnings growth.

“Forward multiples have fallen across major regions since their post-Covid peaks, yet global equities have still delivered strong performance because earnings have grown rapidly.”

In 2026, as of September, hyperscaler companies have issued more than $250 billion in debt, which is more than double their total issuance for all of 2025.

“Hyperscalers have issued upwards of $250 billion of debt this year, over twice their total for all of last year.”