(Bloomberg) -- Global equities are more attractive after the recent rout removed market froth and as investors focus on robust corporate earnings, according to Citigroup Inc. strategists.

“We would view the recent pullback as a buying opportunity,” the team including Mihir Tirodkar and Beata Manthey wrote in a note. “Bullish positioning has unwound and now looks more neutral, particularly in the US. The current earnings season could re-focus investor attention on solid underlying fundamentals.”

The strategists said they’re constructive on the outlook for global earnings, and expect the MSCI All-Country World Index to gain another 5% by end-2024.

After scaling record highs in the first quarter, global equities have retreated this month as investors pushed back rate-cut expectations and geopolitical tensions in the Middle East spiked. The MSCI ACWI index last week posted its biggest decline in more than a year.

Market forecasters at JPMorgan Chase & Co. have a contrarian view to the Citigroup team. Strategist Marko Kolanovic said on Monday that the selloff was likely to deepen along with mounting macroeconomic risks, including rising Treasury yields, a strong dollar and elevated oil prices.

But the Citigroup strategists said they expect the rally to broaden to more sectors over the medium term, which support so-called cyclical markets and sectors that are linked to economic growth. European benchmarks generally have a bigger share of such stocks compared with the US.

Morgan Stanley’s chief European equity strategist, Marina Zavolock, is also bullish on regional stocks. In a note, she said that the recent declines in Europe resemble the market action in 1995, when investors had reduced bets on Federal Reserve rate cuts amid strong economic data. Ultimately, the Stoxx Europe 600 Index rallied 13% that year.

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