Tag Archives: S&P 500 Momentum Index
Big Tech, Breadth and Balance
U.S. equity markets have been whipsawed in the past few days, with initial optimism surrounding Big Tech earnings powering the S&P 500® to an intraday high, and subsequent disappointing reactions to earnings coupled with the Fed’s decision to hold rates steady leading to a sharp retreat for The 500®. The pullback in Tech and the…
Factors for All Markets
Recently, much of the financial media has been occupied with discussing the potential of a bubble in markets. Some have compared the current sentiment to the “animal spirits” of the late 1990s.1 Proponents of this view cite stretched valuations, retail-driven speculation and the circularity of transactions as evidence to support their claims. Whether or not…
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Navigating Market Cycles: The Complementary Roles of Quality and Momentum Indices
Over the long term, both the S&P 500® Quality Index and S&P 500 Momentum Index have outperformed the broader market (as measured by the S&P 500) in terms of absolute and risk-adjusted returns. The quality factor emphasizes financially strong and stable companies, while momentum tracks stocks with sustained price trends. When combined, these strategies create…
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Tech Tonics
U.S. equities have staged a remarkable recovery in the past few months, shrugging off inflation concerns, trade tensions and geopolitical risks, all of which has culminated in multiple all-time highs. Meanwhile, the significant outperformance of the momentum factor, or the continued strength of winning stocks, coupled with the dominance of a few mega-cap companies, especially…
Mom’s Recipe: Sectors, Stocks and Size
The S&P 500® Momentum Index has been one of the best-performing of all the S&P 500 Factor Indices in the past few years. A closer inspection of the drivers of performance identifies constituent selection as paramount, highlighting the importance of dynamically retreating from the largest of the mega caps in periods when smaller names took…
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Size, Momentum and Value
Burgeoning optimism surrounding impending potential Fed rate cuts and a rotation toward smaller-cap stocks in July may have been short-lived, as global market jitters led to the trouncing of stocks across the capitalization spectrum on Aug. 5, 2024. The S&P 500® plunged 3%, its largest daily decline in almost two years. Despite this recent pullback,…
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S&P Momentum Indices Leading the Pack
Momentum strategies, which tend to thrive in trending markets, have recently delivered strong performance due to continued economic strength and positive market sentiment. In the past 12 months, the S&P 500® Momentum Index posted notable outperformance compared with some other S&P 500 factors, as well as the S&P 500 itself (see Exhibit 1). In this…
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Momentum’s Mystique
I confess some superhero powers underwhelm me (really, Hawkeye, arrows?) or stretch credulity further than Hulk’s hyper-elastic jeans. However, one I can appreciate is Mystique, the shape-shifting mutant who constantly alters her appearance to stay one step ahead. If factors were superheroes, I’d argue the S&P 500® Momentum Index (“Momentum”) and Mystique share commonalities, both…
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Reversal or Recovery?
When we think about reversals in the market, we likely think of brief turnarounds in performance. But what if it’s more? What makes a reversal turn into a recovery is a full-fledged long-term improvement in performance. We can apply this logic to Equal Weight’s recent experience. After consistent underperformance since April 2017, the S&P 500®…
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