Market Commentary — March 28, 2022

Bond yields jumped last week, as the Fed’s tone appeared to turn more hawkish. On Monday, Fed Chair Jerome Powell repeated in a speech to the National Association for Business Economics that the central bank may raise rates more than 25 basis points (0.25%) at future meetings if policymakers deem it necessary to curb inflation.

But the market shrugged off the statement by the end of the week, ending mostly higher with the S&P 500 hitting its highest level since February 10. Tech stocks helped lead the rally, helped by gains in Apple on news of strong iPhone 13 sales and a new subscription-based pricing model. A rise in commodity prices continued to boost the energy and materials sectors.

Developments in Russia’s war against Ukraine were also on investors’ radars. After a week of heavy fighting and fears that Russia might be considering nuclear options, stocks gained momentum on Thursday afternoon after an advisor to Ukrainian President Zelenskyy voiced “cautious optimism” on ceasefire talks. Russia’s aspirations now seem refocused on securing the Donbas region in southeast Ukraine for the win as progress in major Ukrainian cities has stalled.

President Biden met with Polish President Andrzej Duda during a historic visit to Poland this weekend where the two allies presented a united front against Russian aggression and reaffirmed their commitment to NATO.

In ETF news, a new ETF launched focused on “high character” CEOs called the Return on Character ETF (ROCI). Among those who didn’t make the cut: Elon Musk and Mark Zuckerberg.

Bloomberg Intelligence is predicting a rule change proposed by the SEC could be the key to a spot bitcoin ETF approval by the middle of 2023. The SEC won’t approve a spot bitcoin ETF without new regulation or surveillance agreements between traditional and crypto exchanges, the note theorizes. If you have access to a Bloomberg terminal, here is the link to the full article.

And finally, ETF Trends is reporting that ARKK has experienced a double-digit rebound after months of negative returns. The reversal of fortune mirrors that of other disruptive technology funds. It should be noted that XOUT, which eliminates companies based on their potential for technological disruption, has slain most of the other ETFs in this category, down only 9% YTD, besting ARKK by 22.7%. Maybe smart beta is better than active after all, or at least identifying the losers instead of trying to pick the big winners?

I hope everyone has a great week ahead and that we make progress on a peaceful solution in Ukraine.

Jane Edmondson
CEO and Co-Founder

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