According to analysis from Barclays, US equity markets are currently signaling their most compelling buying opportunity in close to a year. The bank's strategist, Alex Altmann, has aligned with a growing cohort of optimistic voices on Wall Street who believe the worst of the recent sell-off may be over. Altmann, the head of Global Equity Tactical Strategy at Barclays, stated in a client report that the bank's Equity Tactical Indicator (BETI) fell overnight to -8.3, its lowest level since the tariff-related volatility of April last year. This reading has reached a level that has historically signified an "extremely attractive" entry point for stocks.
The BETI indicator synthesizes 19 input variables, including market internals, positioning, sentiment, and macroeconomic data, to identify tactical turning points in the equity market. Historical data suggests that readings above +7 indicate poor future returns, while levels below -7 correspond to a favorable environment for a market rebound. Barclays data shows that since 2015, when the indicator has been in the -8 to -7 range, the S&P 500 has delivered an average return of 6.6% over the subsequent 42 days, with a success rate of 92%. Based on 38 observed instances, the median return for the same period was 5.1%.
On Tuesday, the S&P 500 index rose by 0.3%, bringing its weekly gain to 1.3% and marking its strongest two-day performance since the onset of recent geopolitical conflicts. The report noted that the pessimism reflected in the latest BETI reading partly stems from a deterioration in the rate of change for the S&P 500. Although the index's pullback from its earlier-year highs appears modest in absolute terms, it is particularly pronounced given the exceptionally low volatility and narrow trading range observed over the preceding six months.
Other contributing factors include a sharp repricing of high-yield credit spreads—even though their absolute levels remain relatively moderate—and a significant drop in Barclays' equity euphoria indicator, both suggesting that bullish sentiment is rapidly receding. Altmann wrote, "The Barclays equity tactical strategy team views US equity risk as attractive during this S&P 500 pullback." He added that relatively restrained positioning among systematic traders and active managers could amplify any potential upward momentum.
Altmann suggested that current market positioning, with Commodity Trading Advisors (CTAs) roughly flat or slightly short and hedge fund net exposure in the 30th to 40th percentile range, increases the likelihood of a "violent beta squeeze." This implies that even with limited participation from short-term funds, indices could be propelled back toward their historical highs.
This month, US stocks faced pressure amid volatile trading due to elevated geopolitical risks but have shown signs of stabilization. The S&P 500 climbed 0.4% on Tuesday, rebounding from a key technical support level after ending a four-day losing streak on Monday. Despite the ongoing conflict and persistent concerns regarding potential impacts from artificial intelligence and the private credit sector, investors have begun to demonstrate a "buy-the-dip" mentality.
Altmann is among a growing number of market experts forecasting a market rebound. Earlier this week, strategists from Goldman Sachs, Morgan Stanley, and J.P. Morgan pointed to earnings growth and valuations—which, while still elevated, are less extreme than before—as factors that should support the market. In early March, Scott Rubner of Citadel Securities also reversed his bearish stance on US equities, citing positive factors such as retail investor inflows, a volatility reset, and favorable seasonal trends.