Down the stretch, Momentum increases its lead
U.S. equity index futures slightly red: Nasdaq 100 off ~0.3%
Initial jobless claims 225k vs 220k estimate
Euro STOXX 600 index down ~0.8%
Dollar up; crude up >2%; gold, bitcoin dip
U.S. 10-Year Treasury yield edges up to ~3.82%
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DOWN THE STRETCH, MOMENTUM INCREASES ITS LEAD
When it comes to major style factors that have historically driven portfolio returns, Momentum is the horse that's leading the pack this year.
And since September 17, the day before the Fed's first rate cut in more than four years, Momentum has increased its lead.
Major investing style factors include stocks discounted to their fundamentals (Value), financially-sound companies (Quality), size (Small Caps), stable, lower-risk stocks (Low Volatility), and stocks exhibiting upward price trends (Momentum).
To this, let's add in as separate factors Mid- and Large-Caps, high-growth companies (Growth), and those stocks that provide income (Dividends).
The SPDR S&P 500 ETF Trust SPY.P is up 19.7% year-to-date (YTD).
Here is a graphic showing YTD factor percentage changes as well as how they have performed vs the SPY (factor/SPY ratio change):
Momentum MTUM.Z is out front with a 28.9% YTD advance. It's followed by Growth SPYG.P up 25.8%. Quality QUAL.Z, up 21.3%, rounds out the top three. All of these groups are outperforming the SPY this year.
Large Caps SCHX.P are up 19.3%, which puts them just off the SPY's YTD pace.
Low Volatility SPLV.P (+14.4%), Value SPYV.P (+12.9%), Dividends NOBL.Z (+11.7%), Mid Caps IJH.P (+11.6%), and Small Caps IWM.P (+8.4%) are all positive for the year, but are underperforming the SPY.
Of note, since September 17, the day before the Fed delivered its rate cut, Momentum has increased its lead, adding 2.6% over the last 11 trading days.
Growth is up 1.5% over this period, while the SPY and Large Caps have both added 1%.
Quality, Dividends, Mid Caps, Value, and Low Volatility are all positive, but have underperformed the SPY since the day before the rate cut.
Small caps are the only style factor that has lost ground since September 17. The IWM is down 0.8% over this period.
In any event, traders will continue to cheer on these style factors as they head down the stretch into year-end 2024.
(Terence Gabriel)
*****
FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
CHINA STIMULUS OFFERS ARRAY OF OPPORTUNITIES - JANUS HENDERSON - CLICK HERE
STOXX ERASES CHINA RALLY, AUTOS DRAG - CLICK HERE
EUROPEAN FUTURES EASE, TESCO UPS PROFIT FORECAST - CLICK HERE
PMIS TO PAVE THE WAY FOR RATE CUTS - CLICK HERE
StyleFactors10032024 https://tmsnrt.rs/3ZQfKuV
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
