At 2024 halfway mark, Momentum leads, but Growth is on its heels
U.S. equity index futures modestly green
Euro STOXX 600 index up ~0.6%
Dollar ~flat; gold edges up; crude rallies; bitcoin up >1%
U.S. 10-Year Treasury yield jumps to ~4.44%
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AT 2024 HALFWAY MARK, MOMENTUM LEADS, BUT GROWTH IS ON ITS HEELS
When it comes to major style factors that have historically driven portfolio returns, halfway through 2024, Momentum is the horse that's still in the lead. However, Growth made the biggest move forward in June, and is now just slightly off Momentum's pace.
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 rose 3.2% in June bringing its year-to-date (YTD) gain to 14.5%.
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.K is out front this year with an 24.2% advance. It's now closely followed by Growth SPYG.P, up 23.2% YTD.
Quality QUAL.Z up 16.1% is next in line. All of these groups are outperforming the SPY so far this year.
Large-Caps SCHX.P are up 13.9% YTD, which puts them just shy of the SPY's YTD pace.
Mid-caps IJH.P (+5.6% YTD), Value SPYV.P (+4.5%), Low Volatility SPLV.P (+3.7%), and Small Caps IWM.P (+1.1%) are all positive for the year so far, but are well underperforming the SPY.
Dividends NOBL.K (+1%) are positive for 2024, however, with their June weakness, they are now the glue in bringing up the rear, and the weakest group vs the SPY this year.
Of note, with Growth's 6.8% jump in May, it actually outperformed both the SPY and the MTUM (+4.4%) for the month. Additionally, in June, Growth enjoyed its best month relative to Value since October 2001.
In any event, with the halfway mark of the 2024 race now in the books, traders will be keeping a close eye on all these factors as they continue to jockey for position through the rest of the year.
(Terence Gabriel)
*****
FOR MONDAY'S EARLIER LIVE MARKETS POSTS:
YEN INTERVENTION THREAT KEEPS GS ON SIDELINES - CLICK HERE
FRENCH BANKS AVOIDING THE WORST FOR NOW - CLICK HERE
SKEWED RISK FROM PAYROLLS - CLICK HERE
FRENCH STOCKS BOUNCE BACK, BUT STILL BELOW EARLY JUNE LEVELS - CLICK HERE
FRENCH STOCKS SET TO RALLY AFTER FIRST ROUND OF VOTING - CLICK HERE
YTDFactorchanges07012024 https://tmsnrt.rs/45R4jo2
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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