6 Best Inverse/Leveraged ETF Areas of Last Week

Wall Street was downbeat last week, with losses seen in all major indexes. The S&P 500 recorded its longest weekly losing streak since the dot-com bubble burst, per a Yahoo Finance article. The S&P 500 (down 3.1%), the Dow Jones (down 2.90%), the Nasdaq Composite (down 3.8%) and the Russel 2000 (down 1.1%) all shed gains.

Concerns that tighter monetary policies to tame surging inflation will slow down global economic growth have weighed on the risk sentiment and driven investors toward the safe-haven assets like U.S. treasuries. iShares 20+ Year Treasury Bond ETF TLT was up 2.3% past week.

Rising greenback weighed on corporate profits. Companies pointing to currency headwinds in their latest earnings reports include Coca-Cola Co, Procter & Gamble and Philip Morris International Inc. Analysts cut their overall forecast for S&P 500 second-quarter profit growth to 5.6% from 6.8% at the start of April owing to the current headwinds, per a Reuters article.

As far as benchmark U.S. treasury yields are concerned, the week started with a 2.88% yield, hit a high of 2.98% and ended at 2.78%. This happened because investors sought bonds’ safety amid renewed recessionary concerns. And due to a decline in the long-term bond yields, TLT gained last week.

Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.

Technology/Internet

The tech-heavy Nasdaq Composite had slipped into a bear market earlier this year, as traders dumped growth stocks due to rising rate concerns, which would weigh on high-flying tech stocks’ valuations. As of Friday’s close, the Nasdaq Composite had slumped about 30% from its record high from Nov 19, 2021.

DJ Internet Bear 3X Direxion WEBS – Up 15.4%

Ultrapro Short QQQ ETF SQQQ – Up 11.99%

Microsectors Fang & Innovation -3X ETN (BERZ) – Up 9.9%

Microsectors Fang+ -3X ETN (FNGD) – Up 8.9%

Inverse S&P 500

The S&P 500 has been hovering around 20% below its recent record high, which would represent the index’s first bear market since the COVID-19 pandemic-induced crash in early 2020.

Ultrapro Short S&P500 ETF SPXU – Up 8.6%

S&P 500 Bear 3X Direxion SPXS – Up 8.4%

Ultrashort S&P500 ETF (SDS)– Up 5.7%

Inverse Dow Jones

The Dow Jones has slipped into a correction (meaning at least 10% from a recent record high).

Ultrapro Short Dow 30 Proshares SDOW – Up 8.1%

Ultrashort Dow30 ETF DXD – Up 5.5%

Inverse Leveraged Consumer Services

Weaker-than-expected earnings results and guidance from some of the major U.S. retailers indicated that companies were having more difficulty passing on rising costs to consumers. Inflation and supply chain disruptions have had on profitability of consumer companies.

Ultrashort Consumer Services ETF SCC – Up 12%

Leveraged Natural Gas

Natural gas futures spiked to a more than a decade high level on tight supply conditions, adverse weather conditions and declining inventories. The jump in prices came as the conflict between Russia and Ukraine sparked fears of global supply disruption in an already tight-supply market. Western countries have slapped severe sanctions against Russia over Ukraine, disrupting trade flows. Sanctions by the United States and other countries will force Russia to supply less natural gas, thereby pushing prices higher.

Ultra Bloomberg Natural Gas ETF BOIL – Up 11.1%

Inverse Leveraged Financials

As long-term bond yields slumped, financial stocks lost gains as these fare better in a rising rate environment.

Financial Bear 3X Direxion FAZ – Up 3.8%

Ultrashort Financials ETF (SKF) – Up 2.5%

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iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports
 
ProShares UltraPro Short S&P500 (SPXU): ETF Research Reports
 
Direxion Daily Financial Bear 3x Shares (FAZ): ETF Research Reports
 
Direxion Daily S&P 500 Bear 3X Shares (SPXS): ETF Research Reports
 
ProShares UltraPro Short Dow30 (SDOW): ETF Research Reports
 
ProShares UltraPro Short QQQ (SQQQ): ETF Research Reports
 
ProShares Ultra Bloomberg Natural Gas (BOIL): ETF Research Reports
 
ProShares UltraShort Dow30 (DXD): ETF Research Reports
 
ProShares UltraShort Consumer Services (SCC): ETF Research Reports
 
Direxion Daily Dow Jones Internet Bear 3X Shares (WEBS): ETF Research Reports
 
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