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Wall Street saw mixed trading last week. The S&P 500 lost (down 1.6%), the Dow Jones gained (up 1.2%), the Nasdaq Composite nosedived (down 3.1%) and the Russell 2000 too slumped (down 1.2%) last week. Rising rate worries and recessionary fears were the key concerns.
Though the annual U.S. inflation rate eased for three months in a row to 8.2% in September 2022, the data was above market forecasts of 8.1%. Meanwhile, core CPI, which eliminates volatile energy and food prices, increased 6.6% on a year. Core CPI rose 0.6% over the prior month (read: 5 Sector ETFs to Win from September Inflation Data).
Meanwhile, U.S. jobs data too came in at stronger. The U.S. economy added 263,000 jobs in September 2022, the least since April of 2021 but higher than market forecasts of 250,000, per tradingeconomics. The reading indicated a decline from an average of 439K in the first eight months of the year, as high inflation and interest rates started to weigh on the economy. Still, the number hints at a tight labor market with employment about 500,000 higher than its pre-pandemic level.
Such data points boosted the chances of even higher rates in the coming days. The benchmark U.S. treasury yield touched as high as 4% on Oct 14 while the two-year bond yield was at 4.48%. At the start of the week, the benchmark bond yield was 3.89% and the two-year bond yield was 4.30%.
There was upheaval in the global markets. The UK prime minister Liz Truss’s administration is preparing to scrap a central part of its tax-cutting agenda following weeks of chaos in financial markets. Against this backdrop, below we highlight the best-performing inverse/leveraged ETFs of last week.
Chinese stocks fell last week as the United States imposed new export curbs on semiconductor supplies to the country. The White House on Tuesday announced some exceptions to the curbs, mainly offshore companies with operations in China. But the country’s local chipmaking capabilities now appear to be severely hampered by the new restrictions.
Semiconductor stocks fell to the lowest level last week since 2020 as the United States expanded China curbs. The United States barred China’s access to American technology. Apart from this, rising rates have played foul in the sector.
Gold prices slumped last week as evident from the 1.6% decline in SPDR Gold Shares (GLD - Free Report) . Hot inflation reading and speculation of a hawkish Fed resulted in rising rates and a stronger greenback. Since most commodities are priced in the greenback, gold prices fell sharply. Plus, as gold is a non-interest-bearing asset, bullion has been underperforming lately.
Silver bullion ETF iShares Silver Trust (SLV - Free Report) lost 7% last week. Silver is used in manufacturing activities. Hence, recession risks have weighed on silver prices massively.
Dow Jones Internet Bear 3X Direxion (WEBS - Free Report) – Up 19%
Rising yields globally particularly hurt valuations of companies in the growth sector (e.g. technology, biotech and Internet), that have high expected future earnings. No wonder, internet stocks suffered a lot.
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Best Inverse/Leveraged ETFs of Last Week
Wall Street saw mixed trading last week. The S&P 500 lost (down 1.6%), the Dow Jones gained (up 1.2%), the Nasdaq Composite nosedived (down 3.1%) and the Russell 2000 too slumped (down 1.2%) last week. Rising rate worries and recessionary fears were the key concerns.
Though the annual U.S. inflation rate eased for three months in a row to 8.2% in September 2022, the data was above market forecasts of 8.1%. Meanwhile, core CPI, which eliminates volatile energy and food prices, increased 6.6% on a year. Core CPI rose 0.6% over the prior month (read: 5 Sector ETFs to Win from September Inflation Data).
Meanwhile, U.S. jobs data too came in at stronger. The U.S. economy added 263,000 jobs in September 2022, the least since April of 2021 but higher than market forecasts of 250,000, per tradingeconomics. The reading indicated a decline from an average of 439K in the first eight months of the year, as high inflation and interest rates started to weigh on the economy. Still, the number hints at a tight labor market with employment about 500,000 higher than its pre-pandemic level.
Such data points boosted the chances of even higher rates in the coming days. The benchmark U.S. treasury yield touched as high as 4% on Oct 14 while the two-year bond yield was at 4.48%. At the start of the week, the benchmark bond yield was 3.89% and the two-year bond yield was 4.30%.
There was upheaval in the global markets. The UK prime minister Liz Truss’s administration is preparing to scrap a central part of its tax-cutting agenda following weeks of chaos in financial markets. Against this backdrop, below we highlight the best-performing inverse/leveraged ETFs of last week.
ETFs in Focus
FTSE China Bear 3X Direxion (YANG - Free Report) – Up 28.8%
Chinese stocks fell last week as the United States imposed new export curbs on semiconductor supplies to the country. The White House on Tuesday announced some exceptions to the curbs, mainly offshore companies with operations in China. But the country’s local chipmaking capabilities now appear to be severely hampered by the new restrictions.
Semiconductor Bear 3X Direxion (SOXS - Free Report) – Up 26.6%
Semiconductor stocks fell to the lowest level last week since 2020 as the United States expanded China curbs. The United States barred China’s access to American technology. Apart from this, rising rates have played foul in the sector.
Microsectors Gold Miners -3X ETN (GDXD - Free Report) – Up 22.7%
Gold prices slumped last week as evident from the 1.6% decline in SPDR Gold Shares (GLD - Free Report) . Hot inflation reading and speculation of a hawkish Fed resulted in rising rates and a stronger greenback. Since most commodities are priced in the greenback, gold prices fell sharply. Plus, as gold is a non-interest-bearing asset, bullion has been underperforming lately.
Ultrashort Silver ETF (ZSL - Free Report) – Up 21.3%
Silver bullion ETF iShares Silver Trust (SLV - Free Report) lost 7% last week. Silver is used in manufacturing activities. Hence, recession risks have weighed on silver prices massively.
Dow Jones Internet Bear 3X Direxion (WEBS - Free Report) – Up 19%
Rising yields globally particularly hurt valuations of companies in the growth sector (e.g. technology, biotech and Internet), that have high expected future earnings. No wonder, internet stocks suffered a lot.