The Factor Report

Market Wrap

For the week ended October 23rd, 2026, stocks lower everywhere. Bonds were higher for the week as the iShares Core US Aggregate Bond ETF (AGG) rose 0.6% with yields falling; the 10-year US treasury yield decreased to 4.99%, according to Yahoo Finance. Asset price drivers of the week:

• Stocks were mixed on Monday as the US rose, Non-US Developed fell, and Emerging Markets were flat. With no data to react to, investors did some buying in the Tech sector after last week's sell-off .
• Indices rose on Tuesday after initially heading lower when housing starts came in negative and well below forecasts. However, they turned positive later in the day as oil prices and treasury yields came down.
• Stocks were mixed again on Wednesday as the US led Developed Markets higher, but Emerging Markets fell. Investors showed some excitement about earnings, especially as SpaceX had a big rally. There was really no other data to react to, so Tech continued its rebound from last week .
• On Thursday, indices headed sharply lower. The severity of the drop was somewhat confounding as Tesla and Meta had reported strong numbers Wednesday afternoon and the 10-year treasury yield finally saw a meaningful drop. SpaceX was down significantly, however, after Musk declined to provide any details about a potential merger with Tesla.
• After trying to rally mid-day, stocks finished the week on a down note. Both the Service and Manufacturing sectors showed strength in September while consumer expectations and sentiment came in ahead of estimates. Oil also headed higher (again). Putting all of that together, investors lost hope for any reprieve from the Federal Reserve before the end of the year.
• Next week will be a busy and important one. We will get building permits, durable goods orders, new home sales, and of course the Federal Reserve's rate decision on Wednesday. For better or worse, that will come a day before the release of their favored inflation reading, the Personal Consumption Expenditures (PCE) price index. It will also be a heavy earnings week with, among others, Verizon, Coca-Cola, Boeing, Google, Microsoft, and Amazon on deck.

Performance Summary

As shown in the chart, the US was this week's winner (it's all relative). Non-US Developed lagged and Emerging Markets were sharply in the red. Within the US, the more traditional stocks of the Dow Jones Industrial Average again outperformed and turned in a positive result. It was the Tech-heavy Nasdaq that was a drag. From a factor perspective, Value, Low Volatility, and Size in the US beat the broader S&P 500.

In The News

An opinion piece on why the most recent Tech sell-off is "just another scare".

https://finance.yahoo.com/markets/article/just-another-scare-wall-street-sees-the-ai-trade-strong-despite-techs-latest-rout-155930040.html

Inflation is slowing, but not in the right places.

https://finance.yahoo.com/economy/article/inflation-is-retreating-from-most-of-the-store--why-your-biggest-bills-are-the-holdouts-chart-of-the-day-113303438.html

What was behind the big bond rally on Thursday?

https://www.marketwatch.com/story/treasury-yields-see-extreme-plunge-why-investors-are-ducking-for-cover-60044c66?mod=home_lead

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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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.