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 S&P 500's extended long positions reaching multi-year highs, 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 leveraged instruments tied to the S&P 500.
The ProShares UltraPro S&P 500 (UPRO) experienced a decline, dropping 1.70% to $96.95 by 3:00 PM on Tuesday, December 17.