Weekly Market Monitor – Week Ending 9 December 2022

• Inverse funds (SNAS, BBUS, BBOZ, BEAR) stole the show last week, leading the top performers as stocks underperformed in the lead up to the FOMC rate decision. After a worse-than-expected PPI report last Friday, investors fear that the Federal Reserve may intend to continue its hawkish stance until the economy is tipped into recession.
• China-oriented ETFs (CETF, CNEW, PAXX, ASAO) also featured heavily in the top performers as all signs from Beijing pointed toward a complete abandonment of China’s previously harsh stance on Covid lockdowns. With cities finally opening up, investors expect the Chinese economy to outperform in the near future.
• Crude oil and energy ETFs (OOO, FUEL, URNM, HGEN) were the theme in last week’s bottom performers as oil prices continued to descend, culminating in its biggest weekly fall since April. Crude oil futures fell harshly following news of key pipelines re-opening, potentially alleviating supply concerns. Energy prices fell overall as investors contemplated lower demand off the back of further recession fears.
• There were $341.4 million in reported inflows. Bond (AESG, FLOT, USTB, GGOV) and cash ETFs (AAA) were especially popular. Bonds have been hammered this year thanks to rising rates and sticky inflation. But as investors approach the new year, it is expected that bond yields may become more attractive.
• There were $175.7 million in reported outflows, marking yet another week of positive flows for the industry.
• The top traded ETFs for the week featured large ASX trackers (VAS, IOZ) as usual. Bond ETFs also had strong showings.

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