Market Commentary — June 1, 2021

Stocks posted solid gains last week, revisiting previous high levels. Tech stocks and small caps were the strongest performers, and growth handily outpaced value as the market’s risk appetite has once again ramped up.

Weekly jobless claims fell more than consensus to a pandemic low of 406,000. On the downside, some regional manufacturing gauges came in lower than expected. And negotiations on a new round of infrastructure spending remain ongoing with Republicans proposing a $928 billion counter to Biden’s $1.7 trillion bill.

There is some evidence that consumers are postponing purchases in response to rising prices, lending credence to the Fed’s position that inflation is a temporary side-effect of supply chain pressures and pent-up demand.

The yield on the 10-year bond is now below 1.6% on Fed assurances, and bond investors appear to be favoring Corporates over government debt.

Some interesting tidbits in ETF land, as BlackRock’s $16 billion iShares MSCI USA Momentum Factor ETF (MTUM) rebalanced and saw an astounding 68% shift of its portfolio into value names, because of course value stocks trade on momentum. Yikes!

WisdomTree filed an application with the SEC for an Ethereum ETF, becoming the second to do so after VanEck.

And Defiance launched its Next Gen Altered Experience ETF (PSY) offering investors exposure to the “next generation of medicine” which apparently includes psychedelics. It tracks the BITA Medical Psychedelics, Cannabis and Ketamine Index. Despite poor performance, Horizon’s Canadian ETF version (PSYK) has attracted more than $50 million in new assets since its January launch. Trippy.

Hope everyone enjoyed the Memorial Day Weekend as we kick off the official start to summer. With at least 62% of American’s having received at least one vaccine dose, a 70% vaccination rate now appears within reach.

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.