Market Commentary — February 14, 2022

Happy Valentine’s Day everyone. Between the Olympics, Valentine’s Day, and Super Bowl, online shopping has been fast and furious.

Last week small-caps outpaced large-cap peers, as big tech ended the week down 15% off peak levels, remaining in correction territory. The market continues to ebb and flow as strong earnings are dampened by higher rate and inflation concerns. Add to that a late-week selloff due to warnings about an imminent Russian invasion of Ukraine.

On a positive note, the so-called “reopening trade” got some traction last week on waning omicron concerns. Shares in restaurants, hotels, casinos, air and cruise lines, and online travel agency stocks all rallied.

January CPI numbers surprised to the upside, coming in at 7.5%, the highest inflation gain since February of 1982. Core prices, ex-food and energy, rose 6%. Amid all these concerns, consumer sentiment also took a hit, with the University of Michigan’s consumer reading coming in at only 61.7, the lowest level since October 2011.

According to FactSet, roughly three out of four S&P 500 companies that have reported earnings have mentioned inflation on their earnings calls, but net margin estimates for the current quarter have fallen only slightly, suggesting that many businesses are just passing on higher input costs to customers.

Finally, in ETF land, we are proud to announce the licensing of our index as the Amplify Emerging Markets FinTech ETF. FinTech is even more important in developing economies as the onramp to the digital revolution and a path to financial inclusion. You can read our White Paper here!

Our Online Retail and E-Commerce Index, created in conjunction with Solactive, will also be launching next week in Australia.

Have a great week everyone, full of “peace, love, and understanding.” I will send a $25 Amazon gift card to the first person who can identify the song that sentiment is from and the brilliant artist who sang it.

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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