Market Commentary — October 25, 2021

Large-cap and mid-cap indexes moved to record-high territory last week, boosted by a series of positive earnings surprises. Further reflective of strong investor sentiment, the VIX fell to its lowest level since the beginning of the pandemic, approaching 15.

One area of market weakness was social media stocks, after downward guidance from Snapchat blamed on Apple’s new iPhone privacy settings. Facebook’s rumored name change did not help matters either. You can “rebrand” but you can’t hide Facebook! Remember when Philip Morris became Altria after giving people lung cancer and ValuJet became AirTran after crashing its plane?

Hopes for more fiscal stimulus bolstered market sentiment, as negotiations continued over the size of a proposed social infrastructure bill and Democratic leaders seemed willing to scrap corporate tax rate increases to make the deal happen.

The week’s economic data was mixed. Housing starts and building permits came in well below expectations on Tuesday, but existing home sales, reported Thursday, jumped unexpectedly to their highest level since January. Industrial production fell 1.3% in September, but much of that miss can be explained away by disruptions from Hurricane Ida and ongoing supply chain issues for autos. And finally, weekly and continuing jobless claims fell more than consensus, reaching new pandemic-era lows, and sending bond yields on the 10-year Treasury to a five-month high level of 1.6%.

The big news in ETF land is the new futures-based Bitcoin ETFs. ProShares BITO started trading on Tuesday on the NYSE, managing to raise $1 billion in less than 2 days. And on Friday, Valkyrie launched its BTF version on the NASDAQ. At the finish line Valkyrie tried to change their ticker symbol from “BTF” to “BTFD”, a reference to the popular meme in the crypto and stock retail investor communities which stands for “buy the [f-ing] dip”. The SEC caught on and asked them to change it back to their original symbol. Oh well, a valiant hail-Mary!

Have a great week. Keep calm and BTFD.

Jane Edmondson
CEO and Co-Founder

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