Market Commentary — January 23, 2023

Recession fears returned last week even as inflation concerns waned. The major indices ended the week mixed, with the DJIA giving back some of its strong YTD gains, while tech stocks and the tech-heavy NASDAQ Composite rose modestly. Growth stocks outperformed on dampened inflation fears and the prospect of lower interest rates.

The producer price index (PPI) gauge of inflation fell 0.5%, to its lowest level since April 2020. More evidence that Fed rate action has slowed economic growth was December’s retail sales figures, which saw a 1.1% decline. While a drop in sales at gas stations was partially to blame, consumers also deferred buying furniture, electronics, and other discretionary purchases. November retail sales were also revised lower.

In other economic news, industrial production fell by 0.7% in December, the most since September 2021, driven by a 1.3% dip in manufacturing output. The job market remains tight, with weekly jobless claims falling yet again.

Netflix reported strong earnings on Friday, as their new ad-supported pricing model appears to be boosting subscriber growth. Shares of Google Alphabet also rallied on an announced 6% cut in their workforce, joining the growing number of tech industry layoffs.

Despite dismal performance in 2022, ARK’s Innovation ETF (ARKK) still managed to attract $1.78 billion in inflows over the last year, the highest total among the universe of 256 thematic ETFs. Interestingly, that pattern has shifted YTD, despite a 10.2% rise in performance, seeing $204 million of outflows.

Putnam Investments rolled out five actively managed ETFs last week, but other than that, the only other ETF to launch was the PIMCO Preferred and Capital Securities Active ETF, which, as its name suggests targets preferreds and capital securities.

There were several announced ETF closures including the actively managed Volt Crypto Industry and Equity ETF (BTCR), the QRAFT AI-Enhanced U.S. High Dividend ETF (HDIV), the KFA Large Cap Quality Dividend Index ETF (KLCD), and the KFA Small Cap Quality Dividend Index ETF (KSCD) with KraneShares, and the APEX Healthcare ETF (APXH). That brings the total number of completed closures for 2023 to seven, according to

ESG backlash is coming to the fore at the World Economic Forum in Davos, with Blackrock and State Street under anti-woke attack. Meanwhile, Vanguard Group, which quit the world’s biggest climate-finance alliance in December, was the only major ETF provider to post an increase in European assets last year thanks to its lower exposure to environmental, social, and governance strategies, according to Morningstar.

Have a great week everyone! Stay warm and dry!

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.