Market Commentary — October 4, 2021

U.S. markets closed out the third quarter in the green, with the S&P 500 eeking out its sixth consecutive quarter of positive performance. September is typically a tough month for markets, with the S&P 500 averaging a 0.56% decline each year since 1945. But this September registered one of the worst monthly declines since the onset of the pandemic.

Investor sentiment has been shaken by inflation and interest rate fears as the Fed appears poised to be tapering. The possibility that the federal government would experience another partial shutdown was averted late last week, but the outlook for the bipartisan $1 trillion infrastructure bill remains murky.

The latest inflation data, the personal consumption expenditures (PCE) price index, rose 3.6% over the last year ending in August which was in line with consensus. But continued reports of supply constraints and higher labor costs heading into the holidays, and rising energy prices have everyone talking about the “I” word, inflation. Bond yields on the 10-year Treasury spiked to a 3-month high.

In ETF news, the BAD ETF, based on Thematic Investment and EQM’s BAD index of Betting/Gambling, Alchohol/Cannabis, and Drug/Biotech stocks just filed. While on the surface it may seem a disparate blend of “sin stocks”, the combo is actually a very powerful, defensive play that has YTD beaten the market (as of 9/30/2021).

In other news, the SEC delayed its decision on 4 Bitcoin ETFs, extending its review of applications from Global X, Kryptoin, Valkyrie, and WisdomTree by 45 to 60 days. But SEC Chairman Gensler has reiterated his support for bitcoin futures ETFs.

Happy first week of October!

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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