Citi Downgrades US Earnings; Barclays Lowers Retail Sector Outlook to Neutral from Positive Amid Margin Concerns

Citi has downgraded its outlook for US earnings, signaling concerns about the economic recovery. In a related move, Barclays has downgraded the US retail sector from positive to neutral, citing that promotions are negatively impacting average unit retails and margins for many companies. Barclays noted that in the current recovery cycle, the only way to achieve further margin expansion would require leveraging existing resources. Despite these downgrades, Citi reported that S&P 500 earnings resilience remains intact following a recent pullback.