Key Words: The stock market isn’t reflecting reality… yet, warns Citigroup

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‘We definitely feel that the markets are way ahead of reality. We really are telling every client to tap the market if they can because we think the pricing now couldn’t get any better.’

That’s Manolo Falco, Citigroup’s
C,
-2.54%

co-head of investment banking, explaining to the Financial Times why he believes the firm’s corporate clients should raise as much cash as possible before the reality of the pandemic sinks in for investors.

“As the second quarter comes along and we start seeing the pain, and the collateral effects of that,” Falco continued, “we think this is going to be much tougher than it looks.”

To his point, last month wasn’t so tough, in terms of market performance. The Dow Jones Industrial Average
DJIA,
-0.06%

, S&P 500
SPX,
+0.48%

, and tech-heavy Nasdaq Composite
COMP,
+1.29%

all closed the books on a strong May on Friday, buoyed by mounting optimism over the easing of lockdowns in the U.S. along with a supportive Federal Reserve.

This while global economies continue to grapple with historic recessions.

“Markets are pricing a V [shaped recovery], everyone’s coming back to work, and this is going to be fine,” Falco told the FT. “I don’t think it’s going to be that easy quite frankly.”

Read:CNBC’s Jim Cramer says a quick recovery is ‘tough to bet on’

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