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Wall Street delivered a decent performance last week. The S&P 500, the Dow Jones and the Nasdaq added 1.3%, 0.7% and 2.4%, respectively. The positive momentum was primarily fueled by anticipation of a less-hawkish Fed going forward and an upbeat corporate earnings season, as well as an oil price slump. Notably, WTI crude ETF USO dropped 4.2% last week.
Although words of caution from several hawkish Fed members halted the winning momentum in Wall Street at the start of the week, about 90% of traders were sticking with their bet that there won't be a rate hike this year, and 25% expected a rate cut in March, according to the CME FedWatch tool’s data published last week. This belief has once again brought back optimism in the market.
Total earnings for the 88.2% of S&P 500 members that have reported results so far are up 1.1% from the same period last year on 1.7% higher revenues, with 81.6% beating EPS estimates and 61.7% beating revenue estimates per the Earnings Trends issued on Nov 8, 2023. Earnings growth represents a notable improvement when compared to the recent quarters.
The National Retail Federation (NRF) stated that consumers are estimated to shell out between $957.3 billion to $966.6 billion during November and December. Thus, spending will increase between 3% and 4% over the same period last year. The growth may be slightly lower compared to recent years, but it’s still in line with the growth rate from 2010 to 2019, when the average annual holiday outlays jumped 3.6%.
All these factors kept Wall Street steady last week. Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
ETFs in Focus
ProShares UltraShort Bloomberg Natural Gas (KOLD - Free Report) ) – Up 28.6%
The Bloomberg Natural Gas Subindex is intended to reflect the natural gas segment of the commodities market. The index consists of futures contracts on natural gas.
Expectations of low demand due to a weeklong warming trend put pressure on natural gas prices and boosted this inverse-leveraged natural gas ETF.
The underlying S-Network MicroSectors Gold Miners Index looks to provide exposure to the performance of the VanEck Vectors Gold Miners ETF and the VanEck Vectors Junior Gold Miners ETF.
Gold bullion ETF SPDR Gold Trust (GLD - Free Report) dropped 2.6% last week as the greenback gained about 0.9%. As the mining stocks act as a leveraged play of the underlying metal, mining stocks and ETF slump more. As a result, VanEck Gold Miners ETF (GDX - Free Report) declined 7.2% last week.
This ETF is active and does not track a benchmark. The AdvisorShares MSOS 2x Daily ETF seeks daily investment results that correspond to two times the return of AdvisorShares Pure US Cannabis ETF.
Pot stocks have registered an uptick last week. Compelling valuation and favorable legal environment probably boosted the space.
The S&P Biotechnology Select Industry Index is designed to measure the performance of a sub-industry or group of sub-industries determined based on the Global Industry Classification Standards (GICS).
This sector underperforms in a rising rate environment. Biotech stocks — high growth and high-risk in nature — slumped last week, hit by a spike in bond yields.
MAX Auto Industry -3x Inverse Leveraged ETN (CARD - Free Report) ) – Up 19.5%
The S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Pain in the EV market has probably weighed on the auto stocks. This is another sector that underperforms in a rising rate environment.
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Best Inverse/Leveraged ETFs of Last Week
Wall Street delivered a decent performance last week. The S&P 500, the Dow Jones and the Nasdaq added 1.3%, 0.7% and 2.4%, respectively. The positive momentum was primarily fueled by anticipation of a less-hawkish Fed going forward and an upbeat corporate earnings season, as well as an oil price slump. Notably, WTI crude ETF USO dropped 4.2% last week.
Although words of caution from several hawkish Fed members halted the winning momentum in Wall Street at the start of the week, about 90% of traders were sticking with their bet that there won't be a rate hike this year, and 25% expected a rate cut in March, according to the CME FedWatch tool’s data published last week. This belief has once again brought back optimism in the market.
Total earnings for the 88.2% of S&P 500 members that have reported results so far are up 1.1% from the same period last year on 1.7% higher revenues, with 81.6% beating EPS estimates and 61.7% beating revenue estimates per the Earnings Trends issued on Nov 8, 2023. Earnings growth represents a notable improvement when compared to the recent quarters.
The National Retail Federation (NRF) stated that consumers are estimated to shell out between $957.3 billion to $966.6 billion during November and December. Thus, spending will increase between 3% and 4% over the same period last year. The growth may be slightly lower compared to recent years, but it’s still in line with the growth rate from 2010 to 2019, when the average annual holiday outlays jumped 3.6%.
All these factors kept Wall Street steady last week. Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
ETFs in Focus
ProShares UltraShort Bloomberg Natural Gas (KOLD - Free Report) ) – Up 28.6%
The Bloomberg Natural Gas Subindex is intended to reflect the natural gas segment of the commodities market. The index consists of futures contracts on natural gas.
Expectations of low demand due to a weeklong warming trend put pressure on natural gas prices and boosted this inverse-leveraged natural gas ETF.
MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD - Free Report) ) – Up 24.7%
The underlying S-Network MicroSectors Gold Miners Index looks to provide exposure to the performance of the VanEck Vectors Gold Miners ETF and the VanEck Vectors Junior Gold Miners ETF.
Gold bullion ETF SPDR Gold Trust (GLD - Free Report) dropped 2.6% last week as the greenback gained about 0.9%. As the mining stocks act as a leveraged play of the underlying metal, mining stocks and ETF slump more. As a result, VanEck Gold Miners ETF (GDX - Free Report) declined 7.2% last week.
AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) ) – Up 24.1%
This ETF is active and does not track a benchmark. The AdvisorShares MSOS 2x Daily ETF seeks daily investment results that correspond to two times the return of AdvisorShares Pure US Cannabis ETF.
Pot stocks have registered an uptick last week. Compelling valuation and favorable legal environment probably boosted the space.
Direxion Daily S&P Biotech Bear 3x Shares (LABD - Free Report) ) – Up 19.9%
The S&P Biotechnology Select Industry Index is designed to measure the performance of a sub-industry or group of sub-industries determined based on the Global Industry Classification Standards (GICS).
This sector underperforms in a rising rate environment. Biotech stocks — high growth and high-risk in nature — slumped last week, hit by a spike in bond yields.
MAX Auto Industry -3x Inverse Leveraged ETN (CARD - Free Report) ) – Up 19.5%
The S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.
Pain in the EV market has probably weighed on the auto stocks. This is another sector that underperforms in a rising rate environment.