ETFs
Best Inverse/Leveraged ETFs of the Past Week – May 13, 2024
Wall Street was upbeat last week, with the S&P 500 up 1.9%, the Dow up 2.2% and the Nasdaq Composite up 1.1%. More importantly, the Dow just had its best week of 2024. On Friday, the Dow posted its eighth consecutive session of gains.
While most of the 30 members of the Dow Jones Index performed well over the past seven days, the Dow’s rally was primarily driven by Amgen (AMGN – Free report) , Amazon.com Inc. (AMZN – Free report) , Apple Inc. (AAPL – Free report) , Boeing (B.A. – Free report) And The Goldman Sachs Group (GS – Free report) .
When it comes to company-specific news, Apple has attracted a lot of attention. The company revealed a new iPad lineup for the first time in two years. The tech giant has launched two new versions of its high-end iPad Pro models and two new versions of its mid-range iPad Air. It also launched the Apple Pencil Pro stylus and an updated Magic Keyboard case for the iPad Pro line.
Among the US economic data, we received downbeat data on consumer confidence, which fell to its lowest level in six months. The University of Michigan survey’s consumer confidence index for May posted an initial reading of 67.4 for the month, up from 77.2 in April and well below the Dow Jones consensus call of 76.
Fed officials reaffirmed their stance in favor of higher rates for a longer period of time. Policymaker Neel Kashkari signaled that rates were likely to remain at historic highs for some time. Boston Fed President Susan Collins also supported the idea, saying it will take longer “than expected” to bring inflation down (read: ETFs will bet on the Dow’s longest winning streak in 2024).
Meanwhile, U.S. companies are enjoying their best earnings season in nearly two years. With 80% of S&P 500 companies already reporting earnings, the index is on track to record 5% earnings per share growth per FactSet in the first quarter, as cited on Yahoo Finance.
This is the largest year-over-year increase since the second quarter of 2022 and higher than the 3.2% growth expected by analysts before the start of the season (read: Time to Tap Wall Street ETFs on Earnings Strength?).
Against this backdrop, we present below some winning inverse/leveraged ETFs from the past week.
Focus on ETFs
Leveraged Gold Miners
3X Leveraged ETN for MicroSectors Gold Miners (GDXU – Free report) – Up 17.1%
Direxion Daily Junior Gold Miners Index Bull 2x Stock (JNUG – Free report) – Up 13.7%
U.S. Treasury yields remained low for most of the week. This added to the strength of gold bullion, which gained around 1.7%. While mining stocks act as leveraged securities on the underlying metal, leveraged mining companies dominated the returns scorecard last week.
Inverted/Leveraged Tesla
GraniteShares ETF 2x Daily Short TSLA (TSDD – Free report) – Up 15.1%
Tesla Inverse T-Rex 2X Daily Target ETF (TSLZ) – Up 14.9%
You’re here (TSLA – Free report) fell 8.4% last week. Tesla shares surged after reporting earnings in late April. However, the company recently announced layoffs to cut costs. Regardless, the company has struggled lately to maintain its profit margin. All of these factors likely weighed on Tesla shares and boosted this inverse/leveraged ETF.
Utilities exploited
Direxion Daily Utilities Bull 3X Stock (UTSL – Free report) – Up 12.5%
As a low beta sector, utilities are relatively protected from sharp fluctuations (ups and downs) in the stock market and are therefore considered a defensive investment or safe haven in times of economic or political turmoil. The recent decline in bond yields has also benefited utility stocks.
Meta exploited
ETF GraniteShares 2x Long Daily META (FBL – Free report) – Up 10.5%
Unlike Tesla, Meta shares fell after reporting earnings last month. But now, investors are likely exerting a bearish buying bias on Meta stock. A lower rate environment also favored growth stocks like technology.
Europe taken advantage of
Direxion Daily FTSE Europe Bull 3x Shares (EURL – Free report) – Up 9.8%
European stocks posted their biggest weekly gain since late January, thanks to strong quarterly profits and optimism about possible interest rate cuts.
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