The Factor Report

Market Wrap

For the week ended January 2nd, 2026, stocks were mixed but ultimately lower globally. Bonds were lower for the week as the iShares Core US Aggregate Bond ETF (AGG) fell -0.17% despite falling yields; the 10-year US treasury yield dropped to 4.19%, according to Yahoo Finance. Asset price drivers of the week:

• On Monday, there was little data to react to, but a surprise jump in pending home sales seemed to dash hopes for a Federal Reserve rate cut this month.
• The bets against a rate cut were exacerbated on Tuesday when the Case Shiller home price index came in ahead of expectations and the Chicago Business Barometer was well ahead of forecasts. US stocks headed lower, but International indices rose.
• Wednesday was a third consecutive day of declines on lower-than-expected weekly jobless claims, but there was also some profit-taking after a strong year for stocks.
• Markets were closed on Thursday in observance of New Year's Day.
• Stocks finally got it together on Friday as indices rose on not much data. After three days of declines and a "time out" on Thursday, investors were picky as big Tech stocks fell, but the rest of the market rose.
• The most closely watched release next week will be on Friday when the December jobs report will be reported. This will be the first on-time monthly employment report we've had since September.

Performance Summary

As shown in the chart, Emerging Markets won the week by far and the US was the only region in the red. Within the US, it was the Tech-heavy Nasdaq that dragged the broader S&P 500 lower as the more traditional Dow Jones Industrial Average bested the broader S&P 500. From a factor perspective, Momentum, Value, and Size outperformed the global All Country World Index (ACWI).

In The News

Do early days predict stock market performance?

https://www.marketwatch.com/story/januarys-first-trading-days-predict-the-stock-markets-year-or-so-they-say-5a858b95?mod=home_lead

How well are Americans prepared for retirement?

https://www.aol.com/articles/heres-average-401-k-balance-183500565.html

How do the wealthy stay wealthy?

https://www.thinkadvisor.com/2025/09/26/11-ways-wealthy-people-stay-that-way/?kw=11%20Unwritten%20Rules%20That%20Keep%20People%20Wealthy&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20251230&utm_term=ta&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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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.