Market Commentary — July 31, 2023

U.S. stocks ended the week higher, with the Dow posting its 13th consecutive gain on Wednesday, its longest winning streak since 1987. But summer vacation season dulled the impact of important data releases, a Fed policy meeting, and corporate earnings season. Growth stocks outpaced value names this week, as tech led the week.

Spurring market optimism was news that the Fed’s preferred inflation gauge, personal consumption expenditures (PCE), excluding food and gas, rose an annual 4.1% in June, down from 4.6% in May. And even more important, the Employment Cost Index, showed wages increased at an annual rate of 4.5% last quarter, down from 4.8%. That was the smallest increase in 2 years.

The week’s data supports the hope that the economy might manage a “soft landing” and skirt recession even with higher rates. GDP grew 2.4% in Q2, well above Q1’s 2.0 growth and the consensus estimate of only 1.8%.

Even though the Fed increased rates another 25 bps in July, expectations for further increases are plummeting thanks to all this good data, with an 80% probability of no change at the next meeting according to the CME FedWatch tool.

What’s new in ETF land? Grayscale sent a letter to the SEC urging them to approve all the spot Bitcoin filings simultaneously so none have an advantage.

Only seven funds were launched during the week ending July 28, the same amount as the previous week. But closures continued their strong trend, with 10 announced or completed during the week. The four ETFs that ceased trading were: ALPS Hillman Active Value (HVAL), TrueShares ESG Active Opportunities (ECOZ), Revere Sector Opportunity (RSPY), and Fount Metaverse (MTRV).

Madison Funds and Macquarie both filed for their first ETFs.

I am off next week on a much-needed vacation, so no market commentary from me, but still lots of interesting index news to share.

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.

Disclosure

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.