Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important market trends for advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.
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US treasury rates got a lift in January on news that the Federal Reserve would accelerate the timeline for raising rates. (Hint: stocks didn’t take too kindly to this, nor to speculation by some analysts that 6 to 7 rate hikes could come this year.) The 6-Month Treasury Rate increased 30 basis points to 0.49%, while the 10-Year rose from 1.52% to 1.79%.
Off the YCharts! Follow the Arc of ARK, or is Berkshire Hathaway the Way?
Warren Buffett once said, “Charlie (Munger) and I would much rather earn a lumpy 15 percent over time than a smooth 12 percent.” But over the past 22 months, perhaps Buffett has never seen anything quite as “lumpy” as Cathie Wood’s ARK Innovation ETF (ARKK), nor a stock as “smooth” as his own Berkshire Hathaway (BRK.B, BRK.A).
ARKK rose as much as 206.1% since the end of February 2020. However, shares have now been cut by more than half since its peak, to the point where Berkshire Hathaway is outperforming the once high-flying ETF as of January’s end. Berkshire’s smoother trajectory also edged out ARKK’s wilder path on an annualized return basis over the past 22 months.
Though equities were down as a whole in January, value stocks took less of a hit. The iShares Russell 1000 Value ETF (IWD) fell 2.4% in January, while its growth counterpart (IWF) sank 8.7%. Value has also outperformed growth by nearly 6 points over the trailing twelve months.
US Retail and Food Services Sales had its worst monthly decline since February 2021, falling 1.9% in December. The US ISM Manufacturing PMI continued its downward trend in December, falling 1.2 points to 57.6, it’s weakest reading since November 2020, though anything above 50 indicates expansion in the manufacturing sector.
The price of Bitcoin was $37,983 as of January 31st, down 19.5% in the month and off 43.0% from its all time high. Ethereum stood at $2,610, representing a 44.2% retracement, and Cardano ended the month at $1.04.
Have a great February! 📈
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