/biz/ - Business & Finance

>Highly optimistic analyst stock recommendations are flashing a warning signal for the equity market rally, according to Citigroup Inc. strategists.

>An index of global sell-side ratings “is back to peak bullishness levels reached in 2000 and 2007, after which global equities halved,” strategists led by Robert Buckland wrote in a note.

>While analysts always have more buys than sells, “they seem especially keen right now,” the strategists said. That has triggered a red flag in Citi’s “bear market checklist,” which otherwise has seen warning signs ease this year as markets have declined.

>The peak in analyst optimism comes amid a rebound that has seen the S&P 500 climb more than 10% from its June low, even as economic data emboldens the Federal Reserve to tighten policy even further to tame inflation. According to Citi, there are “few fears” of an oncoming recession.