Market Commentary — April 4, 2022

The S&P 500 closed out its best month since December, but still posted its first negative quarter in two years, down 4.6% on a total return basis. That was still better than the bond market, which experienced its worst quarter in 40 years. March was the worst month for the Bloomberg U.S. Aggregate Bond Index since July of 2003.

The start of the Federal Reserve’s interest rate hiking cycle, persistent high inflation, and the Russian invasion of Ukraine, all contributed to a volatile quarter for both stocks and bonds. While portions of the yield curve inverted last week, not too many are predicting recession. Instead, the market appears to be favoring longer-dated Treasuries in anticipation of a 50 basis point rate hike in May.

On the economic front, March nonfarm payrolls came in at 431,000 last week which was slightly below expectations for a 490,000 gain in jobs. Wage inflation was in line with expectations.

In ETF news, ARK’s spot bitcoin ETF application was rejected. Value ETFs are back, according to the WSJ, but not all value ETFS are created equal. And Optica Capital just launched a Rare Earths and Critical Materials ETF (NYSE: CRIT) which seems well suited for the times. But given that we helped develop their Index, we are not entirely impartial. Here is a link to our White Paper, which helps make the Investment Case.

Congratulations are in order for XOUT Capital’s founder David Barse who took home an Oscar as a producer of the Academy Award winning documentary “Summer of Soul.”

Counting down to the Exchange Conference in Miami, April 11-14th. Who’s going?!

Jane Edmondson
CEO and Co-Founder

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