Citi is warning that stock markets could fall this summer amid high expectations for second-quarter earnings growth. Scott Chronert, Citi's U.S. equity strategist, is concerned that the S&P 500's year-to-date gains could be in jeopardy as companies face a high bar to clear when the second-quarter reporting season kicks off next month. According to a FactSet estimate, S&P 500 companies are expected to post 8.8% annualized earnings growth in the second quarter. That's a forecast that Chronert said is “probably a reach,” especially for the 493 S&P 500 companies outside of Nvidia and the mega-caps. “What you've done is set the bar very, very high for what companies have to deliver going into the second quarter,” Chronert told CNBC's “Squawk on the Street.” “So what this all means from our perspective is that we need to be prepared for a pullback as we move through the summer months into the fall,” Chronert added. “And then, we think, a better opportunity toward the end of the year.” .SPX YTD Mountain S&P 500 Last week, Chronert was one of several strategists on the Street to raise their S&P 500 year-end target based on a handful of mega-cap tech stocks that have driven the broader index to all-time highs. Chronert raised his 2024 year-end target to 5,600 from 5,100 previously. Goldman Sachs and Evercore ISI also raised their expectations. Even with these upgrades, many investors fear that gains in the second half of 2024 will be limited. On average, strategists expect the S&P 500 to rise to just 5,500 by year-end, according to a CNBC Pro survey. The broader index last hovered around 5,460.
