Record Year for Momentum Trade Is Ending With Widening Cracks
- The strategy of buying stock winners was dominant in 2024
- Yet Friday reversal shows trade may have become too stretched
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For all the Trump Trade triumphalism and hysteria for AI, it’s been a tough year to make money across markets. Now even the trade that powered US stocks is starting to show signs of wavering.
A fickle Federal Reserve and inflation’s refusal to go quietly has been a recipe for cross-asset malaise. The biggest exchange-traded fund tracking long-dated Treasuries swung violently in 2024 before finishing deeply in the red. Commodities rode the hopes and dreams of Chinese stimulus, up and down. Gains were even squeezed in the safest credits, where spiking yields pushed BlackRock’s $30 billion investment-grade ETF to its worst fourth quarter in eight years.