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There's One Technical Reason That Can Save the Global Rally

  • Fourth quarter tends to see momentum factors outperform
  • Tech stocks, Turkish equities, high yield bonds in focus
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Fidelity International's Laud on Markets and Inflation
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’Tis the season for fund managers to ponder their performance this year as they report returns to clients. This may spark a flurry of “window-dressing,” where the year’s best-performing assets are added to portfolios as the end of the fourth quarter draws near.

“Such window-dressing tends to lead to momentum factors showing the best performance in the final quarter,” HSBC Holdings Plc analysts Volker Borghoff and Kai Boecker wrote in a note. Commerzbank strategists Stephan Appelhans and Max Kettner also suggest investors playing catch-up may add juice to this year’s favored trades in coming weeks.