Once-forgotten sectors are perking up
The World Cup games that went into extra time were reminders of just how tough it can be for players to keep up their momentum over the long haul.
Likewise, stocks that have been rocketing along for some time may stumble and lose a step. Case in point: The group of equities in the S&P 500 index that has performed the strongest recently is sputtering so far this quarter.
In fact, leadership has shifted away from the market’s highest-momentum stocks, including once-red-hot semiconductor makers and other AI-focused companies. Since the end of June, those stocks have trailed the index’s lowest-momentum shares (software companies and other recently unloved sectors) by 16.6% (see the chart).
That’s a massive reversal from the second quarter, when the highest-momentum stocks outperformed the lowest-momentum shares by 45%, making this the “high mo’s” best relative return in three decades.
Authored by Mike Dickson
Originally published by Horizon Investments
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