Market Commentary — October 10, 2022

For the first time in four weeks, stocks ended higher but gave back early week gains as Friday’s jobs data was deemed “too strong” to satisfy a hawkish Fed. Energy was the standout sector performer this week, as OPEC decided to cut global production.

Earlier last week, stocks had some of their best moves since 2020, marking the third-best October since 1930, as weaker economic data raised investors’ hopes that the Fed might slow its rate hike pace to fight inflation. The Institute for Supply Management’s (ISM) gauge of manufacturing activity fell to 50.9 in September (levels under 50 indicate contraction), below consensus expectations and its lowest level since 2020. Further encouraging, was those job openings fell to their lowest level in over a year. And Australia’s Central Bank, increased rates by 25 bps instead of the expected 50 bps.

But OPEC cutting production and signs of continued labor market strength restored inflation fears. On Friday, the Labor Department reported that the economy had added 263,000 jobs in September, and the unemployment rate had fallen back to multiyear lows of 3.5%. More concerning was a surprise drop in the labor participation rate, to 62.3%, indicating that competition for available workers could remain intense.

In ETF news, Tuttle Capital Management launched an Inverse Cramer (SJIM) and Long Cramer (LJIM) ETF, allowing investors to go short and long the views of CNBC celebrity analyst Jim Cramer.

Cannabis ETFs rallied on news that Biden was pardoning everyone convicted of marijuana possession, the first step in federal decriminalization.

Sadly, there have been 114 ETF closures in the first three quarters of the year according to ETF Think Tank’s Cinthia Murphy.

On a brighter note, Amplify’s Natural Resources Dividend Income ETF (NDIV) paid its first monthly dividend, yielding 10.49% annually. It follows our index. Energy and material companies continue to generate huge cash flows that are being paid back to shareholders in the form of inflation-resistant dividends. To quote Jim Cramer, “buy, buy, buy!”

We think there is a regime shift in thematic plays, and we aim to stay innovative and forward-thinking.

Jane Edmondson
CEO and Co-Founder

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