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Market Wrap
For the week ended July 19, 2024, stocks gave up their 5-week winning streak and headed lower. There is a saying in the financial industry: "buy on the rumor; sell on the news". While we don't know for sure when or if the Federal Reserve will lower interest rates, there has certainly been some data released of late that would give them the green light to do so. In fact, more than one central bank official has stated that they think they are safe for at least one rate cut. With inflation the key measure, this week we saw both export and import prices coming in lower than expected. That was followed up on Thursday by a report showing jobless claims for the prior week were well ahead of forecasts. Unrelatedly, a global IT outage on Friday sent shares lower to end the week. Next week will be an important one filled with data, including the Fed's preferred inflation gauge (the PCE price index) on Friday. That will be well-timed as officials will be meeting to decide interest rate policy on Tuesday and Wednesday of the following week. Bond investors took a very different view of the potential for interest rate cuts, selling to send the yield on the 10-year US treasury higher to 4.24%.
Performance Summary
As shown in the table, all geographies were lower, but the US held up the best. Within the US, not all was lost. The more traditional stocks of the Dow Jones Industrial Average actually put in a positive return as it was the Tech-heavy Nasdaq that dragged the market lower. Most of that was thanks to concerns over relations with China (regardless of who wins the White House) and what that might mean for semiconductor companies. From a factor perspective, Value, Size, and Low Volatility again outperformed the global All Country World Index (ACWI).
In The News
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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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Returns for global market and US indexes. As of 7/19/24. Source: Morningstar.