Citi Research's recent analysis suggests that the Growth investment style is poised to outperform in 2025, driven by its low macro risk exposures and diverse sector tilts. Despite the extended long positions in the U.S. equity market, which are at a multi-year high, Growth's reasonable valuation and secular tailwinds make it an attractive option. However, the U.S. equity market is currently pricing in a "goldilocks scenario" of lower interest rates and narrowing credit spreads, which could be disrupted by increased macro uncertainties, particularly concerning long-term interest rates. This backdrop has led to a cautious market sentiment, impacting the S&P 500's performance.
The ProShares Short S&P500 ETF (SH) has seen a modest increase, rising 0.60% to $41.90 as of 3:00 PM on Tuesday, December 17.