Market Commentary — July 24, 2023

Markets advanced last week on hopes that the strong labor market, coupled with moderating inflation, will set the stage for a soft landing recovery that avoids recession. Tech stocks did see some profit-taking, with value stocks winning the week.

Retail sales increased modestly in June, up 0.2%, but nonstore retail experienced remarkable growth, with a 9.4% increase. Online shopping has seen a surge in the post-pandemic world as the most convenient and cost-effective retail option. Our Online Retail Index, which is tracked by the Amplify Online Retail ETF (IBUY) is having its best year since 2020 (when all retail was online) up almost 30% YTD, thanks in part to its largest holding … not Amazon … but Carvana.

Carvana is up 862% YTD, staging the company’s comeback of the post-pandemic, selling $3 billion worth of cars last quarter out of its vending machines and restructuring its debt agreement which will save an additional $1.2 billion. Yes Carvana, not Amazon, is IBUY’s largest holding thanks to its modified equal weighting methodology.

New filings for unemployment benefits fell for a second consecutive week, reaching the lowest levels since May. So apparently all the folks with jobs are spending!

There is a great article in the Wall Street Journal on China’s economic woes comparing China’s stuttering economy to Japan’s lost decade. Deflation looms. The workforce is shrinking and aging. Youth unemployment is at record highs. The property boom has turned into a bust, leaving a legacy of indebtedness. And cash-rich consumers won’t spend.

In ETF news, the SEC has accepted six spot bitcoin ETF applications for review.

Avantis just launched an active International Small Cap Equity ETF (AVDS).

And NightShares, the investing firm that aims to take advantage of after-hours gains in the stock market, aka the “Night Effect”, is closing two of its first ETFs in August.  The funds, the NightShares 500 ETF (NSPY) and the NightShares 2000 (NIWM) will halt trading this month and will liquidate on Aug. 10. The funds have been struggling since they launched last June—NSPY had $3.7 million and NIWM only $1.4 million.

Markets are closing out the last days of July! Hope you have all been enjoying your summer. Just watched Barbie and Oppenheimer on back-to-back days over Barbenheimer Weekend. As of the latest estimates, Barbie was expected to ring up over $170 million and Oppenheimer over $80 million in their weekend box office debuts. Which movie gets your vote?

Jane Edmondson
CEO and Co-Founder

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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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