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Wall Street was upbeat last week. The S&P 500 added 1.3% last week, the Dow Jones inched up 0.3%, and the Nasdaq Composite advanced 2.4%. Easing inflation, soft manufacturing data, renewed Fed rate cut bets and the strengthening of the tech rally led to the gains last week.
A decline in Treasury yields earlier in the week bolstered the market rally. Both the 10-year and 30-year rates reached their lowest levels since late March. U.S. technology stocks recorded their largest weekly inflows last week in nine weeks, with the sector seeing a revival after its mega-cap-led rally lost steam by the end of May, per strategists at BofA Global Research, as quoted on MarketWatch.
Tech stocks hauled in nearly $1 billion in the week ending Wednesday, the highest in more than two months, after experiencing the same amount of outflows the previous week, a team of strategists led by Michael Hartnett, chief investment strategist at BofA Global Research, said in a client note on Friday.
Meanwhile, the U.S. economy added 272,000 jobs in May 2024, the maximum in five months, compared to a downwardly revised 165,000 in April, and well above the forecasts of 185,000. The reading is also higher than the average monthly gain of 232,000 over the prior 12 months and 246,000 in the first four months of the year.
Against this backdrop, below, we highlight a few winning inverse/leveraged ETFs of last week.
ETFs in Focus
ProShares Ultra Bloomberg Natural Gas (BOIL - Free Report) – Up 29.8%
As efforts to reduce greenhouse gas emissions intensify, natural gas is anticipated to maintain its critical role in the U.S. electricity generation mix. Natural gas is the largest source of electricity in the United States. With the demand for electricity increasing day by day for seamless operation and execution of artificial intelligence (AI), natural gas has every reason to rally.
NVIDIA (NVDA - Free Report) overtook Apple (AAPL - Free Report) last week, topping $3 trillion in market cap and becoming the second-most valuable company in the United States. NVIDIA has an estimated 80% market share in AI chips for data centers, which are attracting billions of dollars in spending from big cloud vendors. Companies like Microsoft, Meta Platforms and Alphabet are rapidly expanding their AI computing capabilities, boosting NVIDIA's growth (read: NVIDIA Overtakes Apple: ETFs to Tap the Incredible Growth Story).
GraniteShares 2x Long COIN Daily ETF (CONL - Free Report) – Up 15.1%
Bitcoin prices surpassed the $71,000 mark last week, indicating increased market confidence in potential Fed rate cuts. Investors should also note that the short-term correlation between Bitcoin and the Nasdaq 100 Index is at its highest since early 2023 (per Bloomberg), indicating that further gains in the tech-heavy index may coincide with a rise in the crypto market leader (read: Will Bitcoin ETFs Soar on Sooner-Than-Expected Fed Rate Cut?).
The U.S. dollar gained strength last week, which probably went against the gold prices. Top consumer China also paused bullion purchases in May after 18 successive months of buying. Moreover, the latest upbeat jobs data might lead the Fed to cause a delay in rate cut. Both factors went against gold prices and boosted this inverse leveraged fund.
MicroSectors Energy 3X Inverse Leveraged ETN (WTID - Free Report) – Up 11.2%
The Organization of the Petroleum Exporting Countries and allies led by Russia (together known as OPEC+) lately agreed to extend production cuts of 3.66 million barrels per day (bpd) until the end of 2025, along with prolonging cuts of 2.2 million bpd until September 2024.
Despite the extension of production cuts, analysts from Goldman Sachs described the meeting as bearish, as quoted on CNBC. There was a detailed plan to phase out voluntary cuts by eight OPEC+ members over the October 2024 to September 2025 period, signaling a potential increase in production over time. As a result, oil prices fell last week and boosted this inverse leverage product.
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Best Inverse/Leveraged ETFs of Last Week
Wall Street was upbeat last week. The S&P 500 added 1.3% last week, the Dow Jones inched up 0.3%, and the Nasdaq Composite advanced 2.4%. Easing inflation, soft manufacturing data, renewed Fed rate cut bets and the strengthening of the tech rally led to the gains last week.
A decline in Treasury yields earlier in the week bolstered the market rally. Both the 10-year and 30-year rates reached their lowest levels since late March. U.S. technology stocks recorded their largest weekly inflows last week in nine weeks, with the sector seeing a revival after its mega-cap-led rally lost steam by the end of May, per strategists at BofA Global Research, as quoted on MarketWatch.
Tech stocks hauled in nearly $1 billion in the week ending Wednesday, the highest in more than two months, after experiencing the same amount of outflows the previous week, a team of strategists led by Michael Hartnett, chief investment strategist at BofA Global Research, said in a client note on Friday.
Meanwhile, the U.S. economy added 272,000 jobs in May 2024, the maximum in five months, compared to a downwardly revised 165,000 in April, and well above the forecasts of 185,000. The reading is also higher than the average monthly gain of 232,000 over the prior 12 months and 246,000 in the first four months of the year.
Against this backdrop, below, we highlight a few winning inverse/leveraged ETFs of last week.
ETFs in Focus
ProShares Ultra Bloomberg Natural Gas (BOIL - Free Report) – Up 29.8%
As efforts to reduce greenhouse gas emissions intensify, natural gas is anticipated to maintain its critical role in the U.S. electricity generation mix. Natural gas is the largest source of electricity in the United States. With the demand for electricity increasing day by day for seamless operation and execution of artificial intelligence (AI), natural gas has every reason to rally.
Direxion Daily NVDA Bull 2X Shares (NVDU - Free Report) – Up 20.6%
NVIDIA (NVDA - Free Report) overtook Apple (AAPL - Free Report) last week, topping $3 trillion in market cap and becoming the second-most valuable company in the United States. NVIDIA has an estimated 80% market share in AI chips for data centers, which are attracting billions of dollars in spending from big cloud vendors. Companies like Microsoft, Meta Platforms and Alphabet are rapidly expanding their AI computing capabilities, boosting NVIDIA's growth (read: NVIDIA Overtakes Apple: ETFs to Tap the Incredible Growth Story).
GraniteShares 2x Long COIN Daily ETF (CONL - Free Report) – Up 15.1%
Bitcoin prices surpassed the $71,000 mark last week, indicating increased market confidence in potential Fed rate cuts. Investors should also note that the short-term correlation between Bitcoin and the Nasdaq 100 Index is at its highest since early 2023 (per Bloomberg), indicating that further gains in the tech-heavy index may coincide with a rise in the crypto market leader (read: Will Bitcoin ETFs Soar on Sooner-Than-Expected Fed Rate Cut?).
MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD - Free Report) – Up 14.2%
The U.S. dollar gained strength last week, which probably went against the gold prices. Top consumer China also paused bullion purchases in May after 18 successive months of buying. Moreover, the latest upbeat jobs data might lead the Fed to cause a delay in rate cut. Both factors went against gold prices and boosted this inverse leveraged fund.
MicroSectors Energy 3X Inverse Leveraged ETN (WTID - Free Report) – Up 11.2%
The Organization of the Petroleum Exporting Countries and allies led by Russia (together known as OPEC+) lately agreed to extend production cuts of 3.66 million barrels per day (bpd) until the end of 2025, along with prolonging cuts of 2.2 million bpd until September 2024.
Despite the extension of production cuts, analysts from Goldman Sachs described the meeting as bearish, as quoted on CNBC. There was a detailed plan to phase out voluntary cuts by eight OPEC+ members over the October 2024 to September 2025 period, signaling a potential increase in production over time. As a result, oil prices fell last week and boosted this inverse leverage product.