The Factor Report

Market Wrap

For the week ended November 15, 2024, stocks reversed the course of previous weeks and headed higher. It was a quiet start to the week as investors looked forward to some key economic data later in the week. On Wednesday, we got the Consumer Price Index for October. There wasn't much reaction even though inflation was shown to have ticked slightly higher. The following day brought its twin report, the Producer Price Index. This too came in just above forecasts. But most of the negative reaction came on Friday after the release of October's Retail Sales. Consumers continue to spend money and the number came in above estimates. On the surface, there was nothing outlandish about these releases, but there were a few factors that send stocks lower. First, bonds don't like inflation so they sold off, sending interest rates higher, which in turn sends stocks lower. Second, investors are now questioning the path of the Federal Reserve going forward. We may not have as many rate cuts in the offing as once thought. And third (perhaps most importantly), US stocks were running at record highs and letting off some steam is natural and common. As noted, bonds sold off, leaving the 10-year US treasury yield higher at 4.45%.

Performance Summary

As shown in the chart, the US was again this week's winner from a relative perspective. International stocks slumped as investors considered the impact of a pending new US administration on foreign policy and trade. Within the US, the Tech-heavy Nasdaq dropped the least, but the Dow Jones Industrial Average also beat the broader market. From a factor perspective, no factors outperformed the global All Country World Index (ACWI), although our Technology exposure did.

In The News

The IRS is discontinuing the waiver of required distributions on inherited IRAs.

https://www.thinkadvisor.com/2024/11/13/no-more-waivers-ira-beneficiaries-must-take-rmds-in-2025/?kw=No%20More%20Waivers%3A%20IRA%20Beneficiaries%20Must%20Take%20RMDs%20in%202025&utm_source=email&utm_medium=enl&utm_campaign=earlywire&utm_content=20241114&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

An economist who continues to see good things ahead for US stocks...with caveats.

https://www.thinkadvisor.com/2024/11/12/jeremy-siegel-sees-bull-market-charging-into-2025/?kw=Jeremy%20Siegel%20Sees%20Bull%20Market%20Charging%20Into%202025&utm_source=email&utm_medium=enl&utm_campaign=earlywire&utm_content=20241113&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

A good explanation of why a good economy is not always good for stocks.

https://www.marketwatch.com/story/good-news-for-the-economy-is-looking-like-bad-news-for-stocks-ccd29fc4?mod=home-page

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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All written content is for information purposes only. Opinions expressed herein are solely those of Metric, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.