LIVE MARKETS-"We stay in buy-the-dip mode," says Barclays

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"WE STAY IN BUY-THE-DIP MODE," SAYS BARCLAYS

Global equities may have lost momentum heading into September, a typical down month for stocks, but Barclays says the broader backdrop remains supportive for risky assets - and advises investors to keep buying the dips.

"We stay in buy-the-dip mode, looking for rotation into cyclical & exporter laggards on an improving growth/policy trade-off," writes strategist Emmanuel Cau at the UK bank.

He sees several tailwinds: positioning is elevated but not stretched with record cash in money market funds ready to be deployed. Post-Jackson Hole, the Fed looks close to restarting a rate-cutting cycle, and global growth is holding up better than expected. Tariff uncertainty has peaked, PMIs are ticking higher, and earnings revisions are rebounding across regions.

Risks however remain - from fiscal concerns and political instability in Europe to China's AI challenge to U.S. tech - but Cau sees the "Goldilockish" backdrop of resilient growth and easing policy as intact.

Sector-wise, Barclays expects a rotation into laggards such as luxury and chemicals, and is adding short cycle exposure through machinery. It stays neutral on Europe vs Wall Street, overweight FTSE 100 .FTSE vs FTSE 250 .FTMC, and positive on EM/China.

(Danilo Masoni)

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