Market Commentary — December 19, 2022

Investors remain focused on inflation and interest rates this holiday season as the two highly anticipated announcements of the week: CPI and the Fed decision sent markets in opposite directions, higher early in the week and selling off by the end.

CPI (Consumer Price Index) was released on Tuesday indicating only a 0.1% increase in November and an annual rate of 7.1% inflation. This was still well above the Fed’s 2% target, however. On Wednesday, the Fed increased interest rates 50 basis points (.50 percentage points), finally backing off the 75 bps increase of the last four meetings.

But Fed Chair Powell did little to calm fears at his press conference, stressing the need for further rate hikes and highlighting the inflationary dangers of a tight labor market. Similar rate moves and commentary from European central banks on Thursday further darkened investor moods.

Treasury yields did fall on the news, especially on the short end of the yield curve, further inverting it. Interestingly, Duke Professor Campbell Harvey, the “Godfather of the Inverted Yield Curve” says he does not believe it will be correct to predict a recession this time. Here is a great graphic from James Eagle and Visual Capitalist on Visualizing (and Understanding) an Inverted Yield Curve.

In ETF news, the SEC reiterated its decision to reject Grayscale’s GBTC bitcoin trust ETF conversion proposal. Meanwhile, amid crypto turmoil, Hong Kong debuted its first crypto futures ETF. JP Morgan is converting four more of its mutual funds to ETFs, representing $2 billion in AUM. According to Bloomberg, investors are spurning mutual funds in record numbers, driving a $1.5 trillion gap in money flow from the old-school investment vehicles into more-popular ETFs.

And okay performance chasers, just published its list of the 10 best ETFs YTD, or actually through November 23rd. And the #1 non-levered ETF strategy for 2022 was … iShares MSCI Turkey (TUR), up 79.88%. The rest of the names in the top 10 were all tied to the energy sector.

The holiday season is upon us – enjoy!

Jane Edmondson
CEO and Co-Founder

Share this Market Commentary


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.


The information provided on this page is for illustrative purposes only and is not intended to serve as investment advice. The information provided is as of particular time and subject to change at any time without notice.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. EQM Indexes does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. EQM Indexes Indices makes no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. EQM Indexes is not an investment advisor, and makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any of the statements set forth in this article. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by EQM Indexes to buy, sell, or hold such security, nor is it considered to be investment advice.