Wall Street's momentum trading strategies have suddenly unraveled, with the S&P 500 Momentum Index falling over 9% since July, facing its worst quarterly performance in 25 years.
The Wall Street Journal reported on August 30 that the once-popular "momentum trading" strategy (buying rising stocks and shorting falling stocks) has fallen by over 9% since July 1, after a strong performance in the first half of the year. During the same period, the S&P 500 index rose by 2.8%, and the strategy is facing its largest quarterly underperformance in 25 years. Bank of America estimates that July was the second-worst month for momentum trading in nearly 40 years. Goldman Sachs data shows that the monthly underperformance of hedge funds' most-held stock basket relative to the S&P 500 in July was the largest in over 20 years. Biotechnology stock Moderna surged by approximately 150% due to positive news on its cancer vaccine, forcing many quantitative funds and hedge funds that were shorting the sector to cover their positions, becoming one of the triggers for this reversal.
No AI analysis yet. Tap the "AI Analysis" button above to generate one now.
Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
24H Trending
-
1
CoreWeave's default probability exceeds 60%, but NVIDIA CEO Jensen Huang states its financing costs are decreasing and NVIDIA is not required to backstop it.
-
2
Jensen Huang Responds to AI Compute Investment Anxiety: Backs CoreWeave, Says Market Misreads Compute Demand
-
3
UKMTO Warns of "Severe" Threat to Shipping in Strait of Hormuz, Attacks "Highly Likely"
-
4
US embassy warns of potential attacks on Saudi airports, restricts staff travel and urges citizens to take extreme caution
-
5
MSCI adopts new index exclusion rules; Strategy and Metaplanet may face removal, SharpLink placed on review list.
-
6
Fed's Hammack: Financial conditions do not appear restrictive right now
-
7
MSCI Launches Consultation to Reclassify Indonesia Equity Indexes from Emerging to Standalone Market Status
-
8
Porsche CEO Michael Leiters discusses new Mission S supercar, China market, and future of EVs
-
9
Balaji Srinivasan's Network School acquires Farcaster; users must sign 'social smart contract' or get read-only access
-
10
China is accelerating the internationalization of the RMB, aiming to build a more comprehensive financial ecosystem where its functions extend beyond trade settlement.
Markets Today
Recommended Reading


