Market Commentary — October 3, 2022

Turmoil in UK financial markets and lack of confidence in hawkish Fed actions sent stocks to their third consecutive weekly decline for the first time since 2009. The S&P 500 Index broke below its mid-June lows, retreating to November 2020 levels. And the 10-year Treasury breached 4% for the first time since 2008.

There is mounting evidence around the world that the Fed has destabilized and even broken global financial markets. There are rumors that Credit Suisse is teetering on collapse and the UK is not the only economy being strained by the surging US dollar.

There appears to be an emergency, closed-door session of the Fed planned on Monday, and there is speculation the Fed may need to end quantitative tightening (QT) earlier than planned to support the U.S. Treasury market.

There is also worry that whipsawing markets will expose the weak hands of asset managers, hedge funds, and other players who may be overleveraged or take on risky bets. Margin calls and forced liquidations could further unsettle markets. In addition, so-called “zombie companies” that have managed to stay afloat in a low-rate environment, may finally have their day of reckoning.

After a down 8.6% September, it is heartening to know that every time the S&P 500 has dropped 7% or more in September, stocks have done well in October according to Carson Group’s Ryan Detrick.

In ETF news, Blackrock plans to launch a Metaverse ETF.

The Mid-Year 2022 SPIVA US Scorecard revealed that 51% of large-cap managers failed to beat the S&P 500, on track for the best rate in 13 years. Despite the better numbers this year in a bear market, long-term underperformance remains. After five years, the percentage of large caps underperforming benchmarks is 84%, and this grows to 90% and 95% after 10 and 20 years respectively.

Three fund managers have withdrawn applications for almost 130 single-stock exchange-traded funds prompting suggestions that US regulators had privately told them the ETFs would not be approved. Kelly Intelligence, Roundhill Investments, and Tema Global had filed with the Securities and Exchange Commission to create ETFs linked to the share price of a slate of non-US companies, such as Saudi Aramco, Volkswagen, and Tencent.

Here’s to a less spooky October.

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.