Market Commentary — August 8, 2022

U.S. equities were mostly higher last week, despite 4 out of the 5 S&P 500 sessions being negative. Growth stocks outperformed value names. Treasuries were weaker with the yield curve flattening in a crazy week that saw the 10-year drop as low at 2.5% before ending the week at 2.8%. The 2/10 spread moved further into inverted territory, establishing a new post-pandemic divergence.

Gold was up, the dollar was strong, and oil prices dipped below $90 a barrel on renewed global economic concerns. In the U.S., the “peak inflation” thesis was undermined by a strong jobs report that showed the job market still growing and wage inflation high. Meanwhile, multiple Fed speakers played damage control and pushed back on the notion there may be a dovish policy pivot ahead, suggesting the war on inflation is not nearly done.

July’s ISM manufacturing report came in at its lowest level since June 2020. In some good news for inflation, there was a big decline in its prices-paid component and in the ISM services report, the prices-paid was its largest drop since May 2017.

ETF News

In ETF land, BlackRock shuttered its Russia ETF which once held as much as $800 million in assets. Vanguard is about to pass BlackRock as the largest bond ETF manager, with BND usurping AGG in net flows.

Sprott Asset Management on Aug. 2 launched the Sprott ESG Gold ETF (SESG) to invest in gold bullion that meets the firm’s ESG (environmental, social, and governance) criteria. Not sure what those measures would be given than gold mining is not typically associated with being “ESG” friendly.

ETF Index of the Week

FinTech ETFS are surging once again after some strong earnings performance. Our EM Fintech Index licensed as the Amplify Emerging Markets FinTech ETF (EMFQ) saw a gain of 7.9% last week, helped by a strong earnings report from Latin America’s online marketplace and payment giant MercadoLibre, up 25.9% last week. Grab Holdings and Pagseguro were also up in excess of 30%, and Jumia Technologies was up 28%! Read our White Paper here to understand the investment case.

Have a great next week and here’s to more good earnings and better inflation results. A slew of companies — including Palantir, Coinbase, Disney, and Rivian — are set to report earnings next week, along with the latest consumer sentiment, CPI, and PPI data.

Jane Edmondson
CEO and Co-Founder

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