Market Commentary — October 11, 2021

Markets recovered last week, regaining a portion of quarter-end losses. Energy stocks led gains as natural gas prices hit record highs in Europe and major oil exporters voted not to increase production, sending oil prices to a seven-year high.

The third-quarter earnings season is about to kick off amid mounting concerns about debt ceiling talks, inflation, and Fed tapering moves. Debt problems for another Chinese property developer also dampened sentiment as did rising tensions between China and Taiwan.

Friday’s payroll report was met with a mixed reaction. Non-farm payrolls grew by 194k in September which was well below consensus expectations for 500k. The workforce participation rate also ticked lower which was surprising given the expiration of extended unemployment benefits.

Investment-grade corporate bonds are finding buyers as yield spreads widened over Treasuries.

In ETF news, the SEC approved an ETF that tracks stocks with significant exposure to bitcoin. However, there is a host of other ETFs that already do the same, including the Amplify Transformational Data Sharing ETF BLOK which is also active, so this is not really news at all.

BlockFi joined the race and filed for a bitcoin futures ETF. The first approval could come as soon as October 18th, with ProShares filing.

The SEC is issuing warnings about the risky nature of complex leveraged products, just months after they helped greenlight more new funds using the inverse and leveraged structure.

Blackrock is handing off proxy voting power to some of its largest clients. The move comes just as the SEC is proposing new rules re: voting transparency. Just a coincidence I am sure.

Jane Edmondson
CEO and Co-Founder

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