Global Strategy Stretched, But Not Yet Breaking: The Case for Staying with Momentum

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Global Strategy Stretched, But Not Yet Breaking: The Case for Staying with Momentum

Global Research

15 June 2026ab

Global Strategy Global Macro Strategy

GlobalStretched, But Not Yet Breaking: The Case for

Staying with Momentum Nicolas Le Roux

Strategist

nicolas.le-roux@ubs.com

+33-14-953 2118

What the Momentum strategy is about Bhanu Baweja

Momentum strategies aim to capture the persistence, or inertia, in price trends, which Strategist

typically reflects an extended profit cycle. Avoiding sharp turning points in the economic bhanu.baweja@ubs.com

+44-20-7568 6833

cycle and shifts in market leadership is therefore critical. Longer, uninterrupted cycles

can be driven by structural forces, such as rising productivity expectations (e.g. Michel Lerner, CFA

globalisation in the 1990s), or supported by policy (loose monetary policy in the 2010s, Head of HOLT

fiscal expansion in the 2020s). Today, both fiscal support and optimism around AI-driven michel.lerner@ubs.com

+44-20-7883 3649

productivity are helping sustain the global cycle. While it remains early, if the risk of an

oil-driven global recession has indeed been averted, momentum strategies appear to Paul Winter

have already passed an important test. Analyst

paul-j.winter@ubs.com

+61-2-9324 2080

What kind of backdrop does Momentum work in?

One broadly similar to today’s environment: we analyse seven episodes over the past Elena Amoruso

three decades during which momentum significantly outperformed the market. The

elena.amoruso@ubs.com

macro backdrop in which momentum tends to thrive is characterised by sustained +44-20-7567 0239

economic expansion and above-average inflation, conditions more typical of the late

cycle than the early cycle. From a market perspective, momentum performs best in an Maxwell Grinacoff, CFA