Flows and Fundamentals

Citadel

Scott Rubner

Research

20 Pages

Citadel Securities says markets have largely normalized after the April dislocation, with volatility down, positioning lighter, and flows rebuilding. The note points to a more selective setup now, where earnings, buybacks, and single stock dispersion may matter more than broad beta.

Key Takeaways

Earnings Setup Improved: S&P 500 earnings are expected to grow 11.2% year over year this quarter, the strongest pace since 2021, even after valuations compressed.
Buybacks Reaccelerate Soon: U.S. corporates have authorized about $428 billion year to date, putting 2026 share repurchases on pace for roughly $1 trillion at a 90% execution rate.
Retail And Systematics Return: About $3.3 trillion of U.S. options expire this Friday, while systematic strategies are re grossing and retail index to single stock option activity normalized to about 1.3x.
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