The Factor Report

Market Wrap

For the week ended December 13, 2024, stocks finally reversed course and headed lower. There were a number of factors at play this week and perhaps the biggest focus was, as usual, inflation. Investors were anticipating Wednesday's Consumer Price Index and Thursday's Producer Price Index. The former was in-line with expectations, although still ahead of the Federal Reserve's comfort range. Stocks rallied anyway. But some confidence was dashed on Thursday when producer prices came in well ahead of forecasts, leading to some concern that the Fed would have reason not to cut their benchmark interest rate at their meeting this coming Wednesday. With little data to react to and said Fed meeting on everyone's minds, indexes did little to end the week. Interlaced throughout the week was an eye on interest rates, which continued to rise as the 10-year US treasury rose sharply to 4.4%.

Performance Summary

As shown in the chart, Emerging Markets were again this week's winner with the US coming in second place. Within the US, it was the Tech-heavy Nasdaq that again dragged indexes higher as the more traditional stocks of the Dow Jones Industrial Average fell. As a result, from a factor perspective, no factors outperformed the global All Country World Index (ACWI), although our Technology exposure fared quite well.

In The News

An opinion piece on why the "Santa rally" is coming that also explains how your investment dollars get allocated.

https://www.marketwatch.com/story/record-inflows-into-u-s-stocks-to-drive-santa-rally-in-last-days-of-2024-goldman-says-bf243f94?mod=home-page

A study on how much can be safely taken out of investments throughout retirement.

https://www.thinkadvisor.com/2024/12/12/what-4-rule-morningstar-has-a-new-number/?kw=What%204%25%20Rule%3F%20Morningstar%20Has%20a%20New%20Number&utm_source=email&utm_medium=enl&utm_campaign=earlywire&utm_content=20241213&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

A silver lining on retirement statistics.

https://www.thinkadvisor.com/2024/12/10/12-merry-retirement-facts-for-2024/?kw=12%20Merry%20Retirement%20Facts%20for%202024&utm_position=1&utm_source=email&utm_medium=enl&utm_campaign=retirementreport&utm_content=20241210&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

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)

Metric Financial, LLC (“Metric”) is a registered investment adviser offering advisory services in the State of Connecticut and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Follow-up or individualized responses to consumers in a particular state by Metric in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant to an applicable state exemption.

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.