The Old State House. Hartford, CT.
For the week ended February 23, 2024, stocks were higher everywhere. Investors ignored some warning signs about the economy, particularly on Thursday. Weekly jobless claims were lower than expected, the manufacturing sector was shown to be stronger than expected, and existing home sales came in ahead of forecasts. This was tied to comments from several Federal Reserve officials indicating that the central bank is not in any rush to lower interest rates, the hopes of which started the stock market rally late last year. The only thing that seemed to matter was the earnings report of Nvidia, the AI and gaming microchip and software designer. They delivered. Revenue grew more than 250% year-over-year, which led to a 15% rise in the stock price that dragged the rest of the market with it. It is now the third largest stock in the S&P 500 behind Microsoft and Apple. Bond investors spent most of the week in a selling mood based on the aforementioned economic data. But Friday witnessed a reversal, leaving the 10-year US treasury yield about unchanged for the week at 4.28% according to MarketWatch.
As shown in the table, returns were strong around the world, but the US ultimately had the edge. Within the US, neither the Tech-heavy Nasdaq, not the more traditional stocks of the Dow Jones Industrial Average were able to top the broader S&P 500. As a result, it was another good week for factors as Momentum, Value, Size, and Quality outperformed the market.
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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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Returns for global market and US indexes. As of 2/23/23. Source: Morningstar.