The Factor Report

Market Wrap

For the week ended September 6, 2024, stocks reversed the prior three weeks and headed lower. It was a holiday-shortened week filled with economic data and not the good kind. On Tuesday, similar to what we saw last month, a report showed the US manufacturing sector continuing to cool. That was followed on Wednesday by a job openings survey, which indicated there are fewer positions available, making it harder for people to find work. Thursday should have been a positive day as jobless claims, unit labor costs, and a services sector report all came in better than expected. But investors were wary of Friday's all-important August jobs report. Although the unemployment rate ticked lower to 4.2%, the US added fewer jobs than expected last month and the prior month was revised lower as well. Next week we will get two key inflation readings, which will come in time for the following week's Federal Reserve interest rate decision. The question now is whether they will lower by 0.25% or 0.5%. Bond investors were buyers amid all the negativity as the yield on the 10-year US treasury headed lower to 3.72%.

Performance Summary

As shown in the table, it was the US that dragged global stocks lower. Emerging Markets, although lower, were this week's winner on a relative basis. Within the US, the Tech-heavy Nasdaq again exerted its control, pulling the broader market down. The more traditional stocks of the Dow Jones Industrial Average held up relatively well. From a factor perspective, Value, Size, and Low Volatility outperformed the global All Country World Index (ACWI) again.

In The News

Potential cuts for Social Security if Congress doesn't act on it.

https://www.thinkadvisor.com/2024/09/05/heres-how-big-social-security-benefit-cuts-could-be-without-reforms/?kw=Here%27s%20How%20Big%20Social%20Security%20Cuts%20Could%20Be%20Without%20Reforms&utm_position=1&utm_source=email&utm_medium=enl&utm_campaign=dailywire&utm_content=20240905&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

What happens when the 2017 tax changes expire in 2025?

https://www.thinkadvisor.com/2024/09/04/how-to-prepare-for-higher-tax-brackets-in-2026/?kw=How%20to%20Prepare%20for%20Higher%20Tax%20Brackets%20in%202026&utm_source=email&utm_medium=enl&utm_campaign=earlywire&utm_content=20240905&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

Why investors turn to ETFs during times of market stress.

https://finance.yahoo.com/news/why-investors-turn-to-etfs-during-times-of-market-stress-190447871.html?guccounter=1

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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