ETFs
Best Inverse/Leveraged ETFs of the Past Week
Wall Street was optimistic last week. The S&P 500 gained 1.3% last week, the Dow Jones edged up 0.3% and the Nasdaq Composite gained 2.4%. Declining inflation, weak manufacturing data, new bets on Fed rate cuts and a strengthening tech recovery led to last week’s gains.
A drop in Treasury yields earlier in the week reinforced the market rally. The 10-year and 30-year rates have reached their lowest levels since the end of March. US technology stocks recorded their strongest weekly inflows last week in nine weeks as the sector saw a recovery after its mega-cap-led rally petered out in late May, according to BofA Global Research strategists cited on MarketWatch.
Tech stocks brought in nearly $1 billion in the week ending Wednesday, the most in more than two months, after seeing the same amount of outflows the week before, a team of strategists said led by Michael Hartnett, chief investment strategist at BofA Global Research. in a customer note Friday.
At the same time, the U.S. economy added 272,000 jobs in May 2024, the most in five months, compared to a downwardly revised 165,000 in April, and well above forecasts of 185,000. figure is also higher than the average monthly gain of 232,000 in the previous 12 months and 246,000 in the first four months of the year.
Against this backdrop, we present below some winning inverse/leveraged ETFs from the past week.
Focus on ETFs
ProShares Ultra Bloomberg Natural Gas BOIL – Up 29.8%
As efforts to reduce greenhouse gas emissions intensify, natural gas is expected to maintain its critical role in the U.S. electricity generation mix. Natural gas is the largest source of electricity in the United States. As the demand for electricity increases day by day for smooth functioning and execution of artificial intelligence (AI), natural gas has every reason to recover.
Direxion Daily NVDA Bull 2X Stock NVDU – Up 20.6%
Nvidia NVDA has exceeded Apple AAPL last week, surpassing $3 trillion in market capitalization and becoming the second most valuable company in the United States. NVIDIA has an estimated 80% market share of data center AI chips, which attract billions of dollars in spending from large cloud providers. Companies like Microsoft, Meta Platforms, and Alphabet are rapidly expanding their AI computing capabilities, driving NVIDIA’s growth (read: NVIDIA Overtakes Apple: ETFs to Tap Incredible Growth Story).
GraniteShares 2x Long COIN Daily ETF CONL – Up 15.1%
Bitcoin prices surpassed the $71,000 mark last week, indicating increased market confidence in possible rate cuts from the Fed. Investors should also note that the short-term correlation between Bitcoin and the Nasdaq 100 Index is at its highest level since early 2023 (according to Bloomberg), indicating that further gains in the tech-heavy index could coincide with a rise in the crypto market leader (read: Will Bitcoin ETFs Soar Following an Earlier Than Expected Fed Rate Cut?).
The story continues
MicroSectors Gold Miners -3X Inverse Leveraged ETN GDXD – Up 14.2%
The US dollar strengthened last week, which is likely unfavorable for gold prices. China, the main consumer, also suspended its bullion purchases in May after 18 consecutive months of purchases. Additionally, the latest upbeat jobs data could lead the Fed to delay cutting rates. Both of these factors worked against gold prices and boosted this inverse leveraged fund.
MicroSectors Energy 3X Inverse Leveraged ETN WTID – Up 11.2%
The Organization of the Petroleum Exporting Countries and its Russia-led allies (together known as OPEC+) recently agreed to extend production cuts of 3.66 million barrels per day (bpd) until at the end of 2025, as well as extending the reductions of 2.2 million b/d until September 2024.
Despite the extension of production cuts, Goldman Sachs analysts described the meeting as bearish, quoted on CNBC. There was a detailed plan to phase out voluntary cuts by eight OPEC+ members over the period October 2024 to September 2025, signaling a potential increase in production over time. As a result, oil prices fell last week and boosted this inverse leveraged product.
Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click to get this free report
Apple Inc. (AAPL): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
ProShares Ultra Bloomberg Natural Gas (BOIL): ETF Research Reports
MicroSectors Energy -3X Inverse Leveraged ETN (WTID): ETF Research Reports
MicroSectors Gold Miners -3X Inverse Leveraged ETN (GDXD): ETF Research Reports
GraniteShares 2x Long COIN Daily ETF (CONL): ETF Research Reports
Direxion Daily NVDA Bull 2X Stock (NVDU): ETF Research Reports