Time to fade momentum trade, Jefferies says By Investing.com
Momentum Factors Weakening: Jefferies strategist Steven G. DeSanctis notes that momentum factors, particularly Price Momentum, weakened in December and are expected to continue declining in Q1 2025, despite a generally positive performance of quantitative factors throughout 2024.
Quality Factor Outperformance: The Quality factor block performed well in December with a +4.3% spread, contrasting with disappointing results from other factors like "Growth at a Reasonable Price" and the Risk (Off) block, which underperformed despite market declines.
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Index Changes: S&P Dow Jones Indices is making significant adjustments to its major stock indexes this month.
New Additions: The changes include the addition of several technology and infrastructure companies.
Removals: Some well-known companies are being removed from the indexes as part of this reshuffling.
Market Impact: These adjustments may influence market dynamics and investor strategies moving forward.
- Market Uncertainty: The stock market faced challenges last week due to unresolved questions affecting investor confidence.
- Impact of Lack of Answers: The absence of clear answers contributed to volatility and uncertainty in market performance.
- Stock Performance: UiPath's stock was experiencing a rally ahead of the market opening on Wednesday.
- S&P MidCap 400 Inclusion: The automation software company is set to join the S&P MidCap 400 index starting in 2026.
- Market Overview: Stock futures were slightly lower on Wednesday as investors monitored market trends.
- Investor Sentiment: There is anticipation regarding the potential for a Santa Claus rally to influence market performance in the final trading sessions of 2025.
Interest Rate Cuts: The Federal Reserve has resumed cutting short-term interest rates, making a 4% dividend yield for stocks more appealing compared to bank or money-market fund yields.
Dividend Stock Selection: Investors can choose dividend stocks based on various criteria, such as higher yields or focusing on quality and value, as demonstrated by John Buckingham's recent list of 17 dividend-stock value picks shared with MarketWatch.
Market Performance: U.S. stocks experienced selling pressure on Friday, with the Dow Jones Industrial Average losing early gains and falling to session lows.
Current Dow Status: The Dow was down approximately 160 points, or 0.3%, hovering around 48,500, but was still on track for a 1.2% gain for the week.












