Market Commentary — September 5, 2023

Stocks rallied last week as economic data eased investor’s inflation fears. The CME FedWatch tool now shows a 94% probability of no change in rates at the next September 20th Fed meeting. Stocks did post their first negative month in August, since February with the S&P 500 TR Index down 1.6%.

Recapping the week’s economic data, the unemployment rate hit a 17-month high of 3.8%. But employers added 187,000 jobs in August, which was above consensus expectations. Average hourly earnings rose by only 0.02%, indicating continued cooling of wage inflation. And 736,000 people reentered the job market, the highest labor participation rate (62.8%) since the start of the pandemic. This trend should help with wage inflation as well.

On the consumer front, personal spending expenditures (PSE), the Fed’s favorite inflation gauge, jumped 0.08% in July, which was ahead of expectations. And the ISM manufacturing data contracted but climbed to its best level since February.

Although this week’s data was mixed, it has raised expectations that the Fed will remain on hold for the remainder of the year. Indeed Atlanta Fed President Raphael Bostic communicated at a conference, that he thought the current level of rates of “appropriately restrictive”.

News in ETF land was dominated by the news that Grayscale won its lawsuit against the SEC to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. On Thursday, the SEC announced that it has delayed its decision on the other six spot Bitcoin applicants, BlackRock, WisdomTree, Invesco Galaxy, Fidelity, VanEck, Bitwise, and Valkyrie Digital Assets, until October.

Hope everyone had a nice and refreshing Labor Day weekend. Now let’s all get back to work!

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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