ETFs
Best Leveraged ETFs of the Past Week
Wall Street was optimistic last week. The Dow Jones, S&P 500 and Nasdaq Composite hit record highs for the first time in nearly two months. The S&P 500 gained about 1.5%, the Dow rose more than 1.2%, the Nasdaq jumped 2.1% and the Russell 2000 gained 1.7%. The rebound came after the release of weaker-than-expected inflation data, which raised hopes the Fed would cut rates sooner than expected.
In April, inflationary pressures showed signs of easing, with the Consumer Price Index (CPI) on a “core” basis increasing 3.6% year-on-year, in line with expectations. This is a slowdown from the 3.8% increase seen in March. Monthly core price increases also matched expectations of 0.3%, down from 0.4% in the previous three months.
As if that wasn’t enough, retail sales in April remained unchanged, contrasting with a 0.6% increase in March and defying the 0.4% increase expected by economists. This unexpected stagnation in consumer spending indicates a possible shift in consumer behavior amid persistent inflation and higher interest rates. Investors are hoping the gloomy economic data could cause the Fed to reconsider its tough monetary policy stance in the near term.
We would like to note that after the CPI release, market expectations for rate cuts changed slightly, with a slight increase in the likelihood of a rate cut in September, according to the CME FedWatch tool. Following the data release, there was a 52.7% chance of a 25 basis point rate cut in September, up from 50.5% a day earlier (read: 3 Sector ETFs to Bank on Hopes renewed rate cuts from the Fed).
The benchmark U.S. Treasury yield was 4.42% on May 17, 2024, down from 4.48% at the start of the week. Against this backdrop, we present the winning leveraged ETFs from last week below.
Focus on ETFs
ProShares Ultra Bloomberg Natural Gas BOIL – Up 25.9%
The price of natural gas has skyrocketed recently. Supply disruptions, such as the extended Freeport LNG outage and maintenance at Gorgon, as well as geopolitical risks, have contributed to the recent recovery.
ProShares Ultra Silver AGQ – Up 24.5%
The greenback’s strength eased last week on renewed hopes for a rate cut from the Fed. Since the price of bullion is denominated in greenbacks, silver prices have rebounded. Additionally, mining stocks often act as leveraged plays on the underlying metal, giving this leveraged silver mining ETF a boost last week.
2x Bitcoin Strategy ETF BITX – Up 21.6%
Bitcoin rallied last week. During its recovery, other crypto tokens including Solana, Cardano, Polkadot, and Avalanche also showed strength. Growing bets on a short-term Fed rate cut have reignited trade risk sentiment and boosted the fund.
The story continues
GraniteShares 2x Long Daily BABA ETF BABX – Up 20.8%
Chinese e-commerce giant Alibaba announced a slight increase in annual revenue last week. Michael Burry’s investment firm doubled its bets on JD.com Inc and Alibaba Group Holding Ltd. in the first quarter as Chinese stocks bottomed out. This has increased investor appetite for Alibaba shares.
Direxion Daily FTSE China Bull 3X Shares YINN – Up 17.1%
Despite the poor performance of the Chinese economy last year, global investors are returning to stocks this year. Compelling valuation, market restructuring, billions in buyouts, AI boom and its impact on various industries have boosted the space recently. Foreign automakers are partnering with Chinese companies, operating in the field of artificial intelligence and other smart car technologies.
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ProShares Ultra Silver (AGQ): ETF Research Reports
ProShares Ultra Bloomberg Natural Gas (BOIL): ETF Research Reports
Direxion Daily FTSE China Bull 3X Stock (YINN): ETF Research Reports
GraniteShares 2x Long BABA Daily ETF (BABX): ETF Research Reports
2x Bitcoin Strategy ETF (BITX): ETF Research Reports