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Wall Street offered a mixed performance last week, with the S&P 500 losing 0.8%. The Dow Jones Industrial Average has gained 0.8%. The Nasdaq was off 2.1% last week. The Russell 2000 has advanced 3.5% last week. The tech slump weighed on the Nasdaq and the S&P 500.
Wall Street’s tech crash last week was mainly driven by Alphabet Inc.'s (GOOGL - Free Report) earnings report, which highlighted increased capital expenses. Tesla Inc.’s (TSLA - Free Report) stock also suffered following its earnings results due to a lack of details from CEO Elon Musk on the company's self-driving vehicle efforts.
Many feared that the huge AI investments made by big tech companies would pay off later than expected. The scale of profitability of those investments is also unknown now, while the high valuation of AI stocks became a concern for many investors (read: Time for Covered Call ETFs?).
Inside Q2 U.S. GDP Data
Another key event last week was the release of the Q2 GDP growth data for the U.S. economy, which expanded at a faster-than-expected pace in the second quarter of 2024. The advance estimate of second-quarter U.S. GDP revealed that the economy grew at an annualized pace of 2.8% in Q2, well above the 2% growth expected by economists surveyed by Bloomberg, as quoted on Yahoo Finance. The reading came in higher than the first-quarter GDP, which was revised down to 1.4% (read: Small-Cap ETFs to Rally on Upbeat U.S. Q2 GDP Growth Data?).
Ether ETFs Receive Final Approval From SEC
ETFs holding ether (ETH) officially started to trade in the United States on Jul 23, 2024, following the final approval from regulators on Jul 22, 2024. This put the world’s second-largest cryptocurrency in an investment vehicle favored by many professional investors and advisors.
The Securities and Exchange Commission (SEC) has approved BlackRock (BLK), Fidelity, Franklin Templeton, Grayscale and 21 Shares, as announced by the companies (read: Ether ETFs Receive Final Approval From SEC).
Biden’s Exit From Presidential Race
President Joe Biden ended his presidential campaign on Jul 21, 2024. His departure was probably prompted by concerns from party officials about his ability to serve a second term at the age of 81. However, he plans to complete the remaining three months of his term.
Biden also announced his endorsement of Vice President Kamala Harris as the Democratic nominee for president. However, it doesn’t ensure that she will automatically get the nomination (read: AI Stocks & ETFs to Rally on Likely Harris Trade?).
ETFs in Focus
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
As the Fed is likely to cut rates in September, the yield curve steepened and benefitted bank stocks as these increase banks’ net interest rate margin. Plus, the space is undervalued at the current level.
Some upbeat earnings results from aerospace and defense stocks probably have boosted the fund. L3Harris (LHX - Free Report) beat Q2 earnings estimates and upped ’24 EPS view. RTX Corporation’s (RTX - Free Report) also beat on both lines and hiked full-year sales guidance. Northrop Grumman Corporation (NOC - Free Report) too surpassed estimates on both lines and boosted full-year sales outlook.
As the tech stocks crashed in the middle of last week, ether ETFs probably fell due to the retreat of the risk-on trade sentiments. As a result, inverse-leveraged ether ETF gained materially.
Biotech stocks have likely surged due to the anticipated Fed rate cuts and the prospects of lower interest rates ahead. Plus, the space has been thriving with innovations and FDA approvals.
Tesla posted mixed second-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. CEO Elon Musk’s lack of detailing on the company's self-driving vehicle initiative also weighed on the stock and boosted its inverse-leveraged form.
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Best Inverse/Leveraged ETFs of Last Week
Wall Street offered a mixed performance last week, with the S&P 500 losing 0.8%. The Dow Jones Industrial Average has gained 0.8%. The Nasdaq was off 2.1% last week. The Russell 2000 has advanced 3.5% last week. The tech slump weighed on the Nasdaq and the S&P 500.
Wall Street’s tech crash last week was mainly driven by Alphabet Inc.'s (GOOGL - Free Report) earnings report, which highlighted increased capital expenses. Tesla Inc.’s (TSLA - Free Report) stock also suffered following its earnings results due to a lack of details from CEO Elon Musk on the company's self-driving vehicle efforts.
Many feared that the huge AI investments made by big tech companies would pay off later than expected. The scale of profitability of those investments is also unknown now, while the high valuation of AI stocks became a concern for many investors (read: Time for Covered Call ETFs?).
Inside Q2 U.S. GDP Data
Another key event last week was the release of the Q2 GDP growth data for the U.S. economy, which expanded at a faster-than-expected pace in the second quarter of 2024. The advance estimate of second-quarter U.S. GDP revealed that the economy grew at an annualized pace of 2.8% in Q2, well above the 2% growth expected by economists surveyed by Bloomberg, as quoted on Yahoo Finance. The reading came in higher than the first-quarter GDP, which was revised down to 1.4% (read: Small-Cap ETFs to Rally on Upbeat U.S. Q2 GDP Growth Data?).
Ether ETFs Receive Final Approval From SEC
ETFs holding ether (ETH) officially started to trade in the United States on Jul 23, 2024, following the final approval from regulators on Jul 22, 2024. This put the world’s second-largest cryptocurrency in an investment vehicle favored by many professional investors and advisors.
The Securities and Exchange Commission (SEC) has approved BlackRock (BLK), Fidelity, Franklin Templeton, Grayscale and 21 Shares, as announced by the companies (read: Ether ETFs Receive Final Approval From SEC).
Biden’s Exit From Presidential Race
President Joe Biden ended his presidential campaign on Jul 21, 2024. His departure was probably prompted by concerns from party officials about his ability to serve a second term at the age of 81. However, he plans to complete the remaining three months of his term.
Biden also announced his endorsement of Vice President Kamala Harris as the Democratic nominee for president. However, it doesn’t ensure that she will automatically get the nomination (read: AI Stocks & ETFs to Rally on Likely Harris Trade?).
ETFs in Focus
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
Direxion Daily Regional Banks Bull 3X Shares (DPST) – Up 17.4%
As the Fed is likely to cut rates in September, the yield curve steepened and benefitted bank stocks as these increase banks’ net interest rate margin. Plus, the space is undervalued at the current level.
Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN) – Up 15.5%
Some upbeat earnings results from aerospace and defense stocks probably have boosted the fund. L3Harris (LHX - Free Report) beat Q2 earnings estimates and upped ’24 EPS view. RTX Corporation’s (RTX - Free Report) also beat on both lines and hiked full-year sales guidance. Northrop Grumman Corporation (NOC - Free Report) too surpassed estimates on both lines and boosted full-year sales outlook.
ProShares UltraShort Ether ETF (ETHD) – Up 13.7%
As the tech stocks crashed in the middle of last week, ether ETFs probably fell due to the retreat of the risk-on trade sentiments. As a result, inverse-leveraged ether ETF gained materially.
Direxion Daily S&P Biotech Bull 3x Shares (LABU) – Up 12.7%
Biotech stocks have likely surged due to the anticipated Fed rate cuts and the prospects of lower interest rates ahead. Plus, the space has been thriving with innovations and FDA approvals.
Tradr 2X Short TSLA Daily ETF (TSLQ) – Up 12.4%
Tesla posted mixed second-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. CEO Elon Musk’s lack of detailing on the company's self-driving vehicle initiative also weighed on the stock and boosted its inverse-leveraged form.