Market Commentary — April 11, 2022
As investors brace for rate hikes, market action was choppy last week. Defensive sectors such as consumer staples and healthcare recorded solid gains, while technology, communication services, and consumer discretionary sold off. One tech outlier was the shares of Twitter which soared 27% last Monday on news that Elon Musk acquired a 9.2% stake in the company.
Fed policy and the war in Ukraine continue to weigh on market sentiment. The Fed, finally realizing it is behind the curve in fighting inflation, is expected to raise rates by 50 bps in May and is prepared to aggressively reduce its balance sheet by as much as $95 billion per month. The 10-year hit its highest level since early 2019, and the 2/10 portions of the yield curve inverted, often a portend of recession. On a positive note, weekly jobless claims fell to their lower number since 1968, to 166,000.
In ETF news, much of the ETF world, including team EQM will be in Miami at the Exchange ETF Conference this week, April 11-14. There are expected to be 2,000 attendees, more than 1,000 advisors, and 100+ sponsors at the event, along with some great speakers. In other news:
• The SEC approved Teucrium’s Bitcoin Futures ETF.
• SoFi filed for a Web3 ETF concept.
• Several issuers filed for a Short Bitcoin ETF including ProShares, Direxion, and AXS Investments, and are racing to the finish line.
• AXS also just took over Tuttle Capital’s 6 funds, among them the $390 million Tuttle Capital Short Innovation ETF (SARK) that bets against ARK’s flagship ETF.
Looking forward to a great conference. Hope to see some of you there!
CEO and Co-Founder