Monetary Matters with Jack Farley Will the Risk On Party Continue? | Chris Carrano on The Quantitative Factors Driving Markets
20 snips
Jan 19, 2025 Chris Carrano, VP of Strategic Research at Venn by Two Sigma, dives into the world of quantitative market analysis. He discusses how investors can better understand market dynamics through style factors, breaking down key events like the post-Trump Rally and December's market wobble. Carrano highlights the surprising underperformance of small-cap stocks compared to larger equities in 2024, and uncovers how momentum, especially influenced by tech companies, remains a driving force even amidst rising interest rates.
AI Snips
Chapters
Transcript
Episode notes
Burrito Analogy
- Chris Carrano explains factors using a burrito analogy.
- He compares food groups to asset classes and nutritional labels to factors.
Russell 2000 Small-Cap Performance
- The Russell 2000 had its worst small-cap performance year ever, despite being up 11%.
- This highlights the importance of factor analysis for understanding true performance drivers.
Small-Cap Performance Post-Trump Rally
- The Russell 2000's November gains were mainly from the equity and local equity factors, not small-cap.
- Accurately attributing returns is crucial for institutional investors.