Momentum

Category: Quant Insight

Stock momentum continues to grow in the short-term while maintaining a strong long-term signal. Nearly every other asset is flat to slightly negative except for metals and energy commodities. We think the sharp increase in rates last week demonstrates the resurgence of the reflation theme. Momentum in certain stocks sectors, such as materials, also confirm this theme.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based on momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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