The Factor Report

Market Wrap

For the week ended March 14, 2025, it was another tough slog for stocks. Investors were prepared for a week of inflation data as the Consumer Price Index (CPI) and Producer Price Index (PPI) were set to be released on Wednesday and Thursday, respectively. Both reports came in quite benign as the CPI was below forecasts (although still ahead of the Federal Reserve's target level) and PPI was flat for the month. The latter should have gotten a very positive response, but President Trump's threat of a 200% tariff on European alcohol proved to be too big a distraction, especially after earlier in the week he vowed to put the Canadian auto industry out of business. All of this finally pushed the S&P 500 into correction territory (meaning down 10% from its peak), which put investors in a buying mood on Friday. So at least markets ended on a positive note. Next week will be an important one. With concerns about US economic growth in the background, we will get a look at retail sales and home sales. And, of course, the all-important Fed rate decision on Wednesday. It was a choppy week for bonds as well as they headed sharply higher and then sharply lower, leaving the yield on the 10-year US treasury about unchanged at 4.32%.

Performance Summary

As shown in the chart, it was a difficult week everywhere, but the US again suffered the worst losses and Emerging Markets held up best. Within the US, both the Tech-heavy Nasdaq and the more traditional stocks of the Dow Jones Industrial Average underperformed the broader S&P 500. From a factor perspective, all factors except Quality outperformed the global All Country World Index (ACWI).

In The News

How do stocks behave after they fall into correction territory?

https://www.marketwatch.com/story/s-p-500-flirts-with-correction-territory-as-trumps-trade-war-escalates-heres-what-history-says-could-happen-next-f4e779d9?mod=home_lead

A new bill that would limit Social Security clawbacks.

https://www.thinkadvisor.com/2025/03/13/new-bill-limits-social-security-clawbacks-to-10-year-window/?kw=New%20Bill%20Limits%20Social%20Security%20Clawbacks%20to%2010-Year%20Window&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20250313&utm_term=ta&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

What happens if Trump's original tax cuts expire?

https://www.thinkadvisor.com/2025/03/12/americans-would-face-22-tax-hike-if-trump-cuts-expire-top-republican-says/?kw=Americans%20Would%20Face%2022%25%20Tax%20Hike%20if%20Trump%20Cuts%20Expire&utm_position=1&utm_source=email&utm_medium=enl&utm_campaign=financialplanninginsider&utm_content=20250312&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

Disclosures

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s). Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized investment advice from Metric Financial.

All data and performance information sourced from Morningstar and MarketWatch, unless otherwise indicated.

USA is the MSCI USA index, Non-US Developed is the MSCI EAFE index, Emerging Markets is the MSCI Emerging Markets index, and All Country World is the MSCI ACWI index. One cannot invest in an index. Because the factor indexes have varying inception dates, some of the returns provided are back-tested and do not represent actual performance. Inception dates are as follows:

Momentum = MSCI ACWI Momentum NR USD Index (Inception: 11/30/95)

Value = MSCI ACWI Enhanced Value NR USD Index (Inception: 5/29/15)

Quality = MSCI ACWI Quality NR USD Index (Inception: 5/29/92)

Low Volatility = MSCI ACWI Minimum Volatility (USD) NR USD Index (Inception: 5/28/93)

Size = MSCI ACWI Risk Weighted NR USD Index (Inception: 4/6/11)

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