Market Commentary — December 13, 2021

Investor fears surrounding the omicron variant of COVID subsided last week as early indications suggest it is contagious but mild and that current booster shots were likely 70-75% effective in preventing illness. The S&P 500 saw its best weekly gain since February, with tech stocks driving much of the market’s rally.

The market also reacted favorably to economic news. On Thursday, the labor department reported that only 184k Americans applied for unemployment benefits, the lowest number since 1969. However, the multi-decade strength in the labor market is contributing to decade-high levels of inflation. November CPI rose 6.8% on a year-over-year basis, the biggest jump since 1982. Rising energy costs are also partially to blame, but even the core rate, excluding food and energy, was up 4.9% suggesting that wage pressures and supply chain issues remain a key factor.

Retail ownership of ETFs slipped below 40% according to research compiled by Citigroup, as institutional investors increase their use of ETF products to build portfolios. The institutional uptake is particularly pronounced in fixed income. Also behind the trend is the evolution of advisers moving away from transaction-based to fee-based business models. That being said, retail investors love ETFs too, so maybe what is really going on is that we all heart ETFs!

The holidays are a time for giving and a time to “pay it forward”. This year, EQM Indexes will be contributing to three organizations it supports: the Leukemia and Lymphoma Society, The Monarch School, and Wounded Warrior Project. We hope you will also consider a donation to these worthy organizations or to others you support to close out the year.

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.

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