The Factor Report

Market Wrap

For the week ended February 6th, 2026, stocks were modestly lower globally. Bonds were higher for the week as the iShares Core US Aggregate Bond ETF (AGG) rose 0.5% with yields falling; the 10-year US treasury yield dropped to 4.20%, according to Yahoo Finance. Asset price drivers of the week:

• The week started out on a positive note when Monday brought a rebound from the prior week's soft markets. Investors cheered a report showing US manufacturing expanded more than expected in January.
• Things quieted down as indices were mixed on Tuesday. Concerns began to surface about an impending slew of earnings reports, especially from big Tech and Tech-related companies.
• It was a mixed day on Wednesday as Non-US Developed rose, but the US and Emerging Markets fell. In the US, a report showed less private jobs were added in January than expected (according to the ADP employment report). Investors awaited earnings from bellwether Alphabet (Google).
• Stocks slumped on Thursday as investors showed greater concern that AI spending will not reap rewards for earnings. Furthermore, software stocks struggled as fears mounted that AI companies will make software obsolete. Investors awaited yet another key earnings report from Amazon.
• Despite a sharp drop in Amazon's stock thanks to more capital spending and an earnings miss, there was a strong rebound in broader indices on Friday. Investors were doing some bargain hunting on  hopes that Tech spending concerns are overblown.
• Next week will be a busy one as we will hear commentary from a number of Federal Reserve officials ahead of key economic data. On the docket are import prices, a delayed January jobs report, and the Consumer Price Index, an important inflation reading.

Performance Summary

As shown in the chart, Non-US Developed won the week and was the only region in the green. Emerging Markets fell more than 1% and the US was just below flat thanks to Friday's rally. Within the US, the Dow Jones Industrial Average was by far the winner as it was Tech and Tech-related shares that dragged the broader market lower. Thanks to that rotation, from a factor perspective, all factors except Momentum outperformed the global All Country World Index (ACWI).

In The News

Will AI make software obsolete?

https://www.marketwatch.com/story/software-ate-the-world-now-wall-street-is-worried-ai-will-eat-software-88661ed5?mod=home_lead

It's time again to consider rooting for the NFC to win the Super Bowl.

https://www.thinkadvisor.com/2026/02/05/super-bowl-2026-should-stock-bulls-root-for-the-seahawks/?kw=Super%20Bowl%2060%3A%20Should%20Stock%20Bulls%20Root%20for%20the%20Seahawks%3F&utm_position=1&utm_source=email&utm_medium=enl&utm_campaign=dailywire&utm_content=20260205&utm_term=tadv&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

President Trump signed a spending package that takes aim at drug prices.

https://www.thinkadvisor.com/2026/02/03/president-signs-12t-spending-package-promotes-drug-pricing-shift/?kw=President%20Signs%20%241.2T%20Spending%20Package,%20Promotes%20Drug%20Pricing%20Shift&utm_position=1&utm_source=email&utm_medium=enl&utm_campaign=lifeannuitypro&utm_content=20260203&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)

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