Market Commentary — February 22, 2021

Rising interest rates weighed on stocks this week thanks to a combination of hopes for future stimulus, continued easing of monetary policy, better-than-expected fourth-quarter earnings, and more progress in fighting the coronavirus. The yield on the benchmark 10-year Treasury note rose to its highest levels in nearly a year.

Good news has investors spooked about future inflation and an overheated economy. But economic data continues to support the need for more stimulus. Weekly jobless claims jumped to 861k, the most since January. And housing data also missed to the downside, as housing starts retreated from a nearly 14-year high.

In addition, a severe winter storm wrought havoc over much of the Midwest and South, particularly in Texas, where millions were without water or power. Besides the human toll and suffering, the shutdown of much of the region’s massive oil and gas infrastructure is also expected to have negative ripple effects across the national economy.

ETF investors dumped $1.8 billion in fixed-income assets last week on speculation that central banks might have to reduce accommodative monetary policies to stave off inflation. Investors were net purchasers of government-mortgage ETFs (+$396 million) and government-Treasury ETFs (+$328 million), while being net redeemers of corporate high-yield ETFs (-$1.2 billion), corporate investment-grade debt ETFs (-$620), and international & global debt ETFs (-$593 million).

Once again, make sure you get your nominations in for 2020’s ETF.com Awards! Nominations close on February 28th.

Jane Edmondson
CEO and Co-Founder

About

EQM Indexes LLC is a woman-owned firm dedicated to creating and supporting innovative indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 25 years in the investment industry.

Disclosure

The information provided on this page is for illustrative purposes only and is not intended to serve as investment advice. The information provided is as of particular time and subject to change at any time without notice.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. EQM Indexes does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. EQM Indexes Indices makes no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. EQM Indexes is not an investment advisor, and makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any of the statements set forth in this article. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by EQM Indexes to buy, sell, or hold such security, nor is it considered to be investment advice.