The Factor Report

Market Wrap

For the week ended September 12th, 2025, stocks were again higher everywhere. Bonds were also higher for the week as the iShares Core US Aggregate Bond ETF (AGG) rose 0.44%; the 10-year US treasury yield fell to 4.06%, according to Yahoo Finance. Asset price drivers of the week:

• Monday was a carryover from Friday's weak jobs data; investors continued to place bets that the Federal Reserve will cut their benchmark rate next week, perhaps by as much as 0.50%, and indices rose.
• On Tuesday, we got more of the same: with not data to react to, all eyes were on Wednesday's Producer Price Index, one of two key inflation data points for the week. Stocks rose again on hopes it would be tame.
• While Wednesday did not bring a Goldilocks number, it was good enough to validate investor optimism. The headline data actually showed prices falling for August, but core inflation, which excludes food and energy prices, rose in-line with forecasts.
• That was followed on Thursday by a related report - the Consumer Price Index. There the headline was actually higher than estimated, but the core number was right on target, so indices rose again.
• Friday was mixed as Tech stocks found their way higher, but the Dow Jones Industrial Average fell, leaving the broader S&P 500 flat. Investors appeared to be taking some profits after a strong week.
• Next week will be a busy and important one. We will get multiple reports on the health of the housing market, import prices (more important nowadays due to tariffs), and US leading economic indicators. But of course investors will be waiting with bated breath for 2 pm on Wednesday when Federal Reserve Chairman Jerome Powell will announce the central bank's rate decision and outlook.

Performance Summary

As shown in the chart, Emerging Markets stood out again as the week's big winner, with Developed Markets positive, but lagging far behind. Within the US, the Tech-heavy Nasdaq outperformed thanks to hopes for an interest rate cut for the Fed. The more traditional stocks of the Dow Jones Industrial Average lagged behind, but not by much. From a factor perspective, Momentum and Value outperformed the global All Country World Index (ACWI).

In The News

A great piece on why homebuyers waiting for the Federal Reserve to cut its rate may be disappointed.

https://www.marketwatch.com/story/dont-expect-mortgage-rates-to-fall-after-the-feds-interest-rate-cuts-but-heres-one-move-borrowers-can-make-right-now-fb69d708?mod=home_lead

A projection of key tax rates that may be changing soon.

https://www.thinkadvisor.com/2025/09/11/9-tax-threshold-estimates-for-2026-retirement-planning/?kw=9%20New%20Tax%20Threshold%20Estimates%20for%202026%20Retirement%20Planning&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20250912&utm_term=ta&oly_enc_id=6911H2583589A7Z&user_id=3d158419d93f4751d4b3b79dd78d9abf446b89b61e92e7567cb4126b86cb53c5

Will Robinhood and Fan Duel blur the line between sports and stock betting?

https://finance.yahoo.com/news/the-gray-area-robinhood-and-fanduel-are-using-to-bring-sports-betting-and-stock-trading-closer-together-162615447.html

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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