Core Viewpoint - The main takeaway from Citi's research is that investors should remain in the market despite concerns about a stock bubble, as historical trends suggest strong forward returns after entering a bubble [1][2]. Market Conditions - US equities are currently considered to be in a bubble, with the S&P 500 up 35% from its low in early April, raising concerns about overvaluation [2][3]. - Popular metrics indicate that the market appears overvalued, including the Case-Shiller price-to-earnings ratio and the Warren Buffett indicator [3]. Investment Strategy - Investors are advised to stay long on US stocks until clear indicators suggest a market downturn [7]. - Citi emphasizes not to sell during a bubble but to wait until it bursts [5]. Indicators for Selling - Two key indicators are identified for determining when to exit the market: 1. **POLLS Indicator**: A composite gauge measuring market positioning, optimism, liquidity, leverage, and stress. A reading above 18 suggests a potential bubble burst, while the current level is at 13 [6]. 2. **"When the Generals Fail" Indicator**: Indicates market turnover when 3 out of 7 leading S&P 500 stocks fall below their 200-day moving average. This indicator is not currently signaling a warning [6]. Market Outlook - Citi believes the stock bubble is in its early stages compared to historical bubbles dating back to 1929 [8]. - The Federal Reserve has restarted its easing cycle, which is atypical during stock bubbles, suggesting continued support for stock prices [8]. - Expectations for Fed rate cuts are higher than anticipated, with Citi forecasting a 100 basis points cut over the next six months, which could further boost stock prices [8].