The Factor Report

Market Wrap

For the week ended January 16th, 2026, stocks were higher everywhere. Bonds were higher for the week as the iShares Core US Aggregate Bond ETF (AGG) rose 0.31% as yields fell; the 10-year US treasury yield dropped to 4.17%, according to Yahoo Finance. Asset price drivers of the week:

• It looked like a disappointing start to the week when indices dropped on a Department of Justice investigation of Federal Reserve Chairman Jerome Powell (regarding whether he lied to Congress about building renovations). But they recovered later in the day as investors dismissed it and looked forward to a data-filled week ahead.
• On Tuesday, the selling resumed. Despite a friendly Consumer Price Index report that could bode well for a Federal Reserve rate cut, new home sales came in much higher than expected, giving investors pause.
• Wednesday was a mixed day as the US fell, but International rose after a report showed the Producer Price Index was much higher than forecasted, although it was a November number. US retail sales were also higher than expected.
• Thursday saw indices rise despite some strong economic data (initial jobless claims below forecasts and the New York and Philadelphia manufacturing surveys above forecasts). Tech led the way as Taiwan Semiconductor gave some hope about the profitability of AI.
• Friday closed out the week with a mixed bag as the US and Emerging Markets fell, but Non-US Developed rose. Investors weren't quite sure what to do when Trump appeared to waver on his pick for the next head of the Federal Reserve.
• Next week will be a quiet one as markets are closed on Monday in observance of MLK, but we will get a key inflation indicator on Wednesday. The Personal Consumption Expenditures (PCE) price index is the Fed's preferred measure.

Performance Summary

As shown in the chart, Emerging Markets was by far the week's winner and the US actually dropped a bit. Within the US, the Dow Jones Industrial Average carried the week as Tech-related stocks dragged the broader S&P 500 lower despite Thursday's rally. From a factor perspective, all factors except Quality outperformed the global All Country World Index (ACWI).

In The News

An interesting piece on whether Fed Chair Powell will leave at the end of his term in May.

https://www.marketwatch.com/story/trump-tried-to-give-powell-one-last-shove-out-the-door-now-hes-likely-to-stay-ab5e4ab9?mod=home_lead

A great article on using retirement funds for a home purchase (or anything else).

https://www.marketwatch.com/story/trump-wants-to-let-you-take-money-from-your-401-k-to-buy-a-house-putting-it-back-is-complicated-da955f85?mod=home_ln

A highly debatable piece on whether inflation is overstated.

https://www.marketwatch.com/story/is-inflation-actually-lower-than-we-think-this-economist-says-yes-5d4581f1?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.