But some remarkable shifts that took place underneath the surface caught the attention of strategists, and are inflicting severe pain on a number of hedge funds.
In short, there's been a massive rotation away from the best-performing stocks and into those that had been neglected. That is known as a rotation from momentum stocks, or those that have had the wind behind their backs, to value stocks, or those stocks that had been ignored and are considered cheaper.
Goldman Sachs said in a note that the decline on momentum"ranks among the sharpest on record," and Morgan Stanley sent a memo to hedge-fund clients, seen by Business Insider,The sudden and decisive rotation exposes how vulnerable investors have become to swings of this nature, according to Peter Oppenheimer, the chief global equity strategy at Goldman Sachs. In a recent note to clients,
he said the rotation would most likely be short-lived and explained how to align with the longer-term winnersMarko Kolanovic, JPMorgan's global head of macro quant and derivative strategy, identified a pattern within the shift that has happened only twice before. Specifically,, while the same indicator for large companies on the S&P 500 reached its maximal positive reading.
Ok let me read this and see if I can understand any of it. I really don’t understand anything about Wall Street.
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Source: CNBC - 🏆 12. / 72 Read more »