The Old State House. Hartford, CT.
For the week ended June 2, 2023, stocks were higher. During the holiday-shortened week (in the US), there were a couple of missteps early on as investors fretted whether or not Congress would approve the Biden-McCarthy debt ceiling deal. However, Thursday saw a sharp rally after the House passed the deal, getting a bit closer to avoiding the unthinkable - A US default. Friday saw the real action after the Senate approve the deal as well and the May jobs report was released. It was about as goldilocks as one can get. While the US added almost double the expected amount of jobs (which would have been considered a bad sign for Federal Reserve rate hikes), unemployment ticked higher and wage growth was slower than expected. It was the latter two points that investors cheered because they signal a slowdown in the things that the Federal Reserve wants to slow down. Bonds disagreed on Friday and sold off, but were still higher on the week as the 10-year US treasury yield moved lower to 3.7%, according to MarketWatch.
As shown in the table, the US was the best performer for the week by far, but all regions were positive. Within the US, despite an early rally from Technology stocks, the more traditional Dow Jones Industrial Average finally got a win. However, because of the dominance of Technology stocks, no factors outperformed the broader market. The long-term results continue to demonstrate factor efficacy. For the 15-year periods 3 out of 5 factors beat the market with Size not far behind for a fourth.
In The News
A great piece on the future of social security in the wake of the debt ceiling deal.
An important look at an Ex-Wells Fargo executive fined $5 million for misleading investors.
A great look at what's included in the debt ceiling deal.
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 performance information sourced from Morningstar, 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 6/2/23. Source: Morningstar.