We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Play These Inverse ETFs if Wall Street Loses Momentum
Read MoreHide Full Article
After the revival of Trump bump, Wall Street seems to have taken a breather. The Dow Industrials and S&P 500 indexes underwent their worst day in seven weeks on Oct 25. The S&P 500, NASDAQ Composite and Dow Jones Industrial Average lost about 0.5% each on that day (read: 5 Biggest ETF Winners of Trump Trade Resurgence).
The broader market had a great run since Trump announced plans for tax reform in late September. However, the double whammy of rising rates and subdued earnings weighed on the market recently, if we go by an article published on Reuters.
On Oct 25, 207, yield on 10-year benchmark Treasury yield was 2.44%. Yields have been on an uptrend on faster Fed policy-tightening projections. A prolonged source of easy money contributed to the eight-year long bull market greatly. Now, indications of fast ceases in easy dollars may cut the rally.
Plus, overvaluation concerns have been rife in the U.S. equity market for quite some time now. Though the ongoing earnings season has been pretty upbeat, investors probably have started analyzing to what extent this surge in earnings justify the inflated valuations, as per the Reuters article.
If this was not enough, lackluster earnings from AT&T (T - Free Report) (down 3.9%) weighed on indexes. Boeing (BA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Chipotle (CMG - Free Report) lost about 2.9%, 13.5% and 14.6% on Oct 25 as an aftershock of earnings or guidance disaster.
Amid all the upheavals, volatility levels flared up, with iPath S&P 500 VIX ST Futures ETN (VXX - Free Report) ) rising about 3.1% on Oct 25. These worries may keep the stock market volatile, giving investors a chance to ride it out through inverse ETFs. While there are several options available in the space, we have highlighted a few ETFs that are widely spread across a number of sectors and not concentrated on a particular sector or industry.
It offers inverse unleveraged exposure to the NASDAQ-100 Index.
Bottom Line
As a caveat, investors should note that such products are suitable only for short-term traders as these are rebalanced on a daily basis (see: all the Inverse Equity ETFs here).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Play These Inverse ETFs if Wall Street Loses Momentum
After the revival of Trump bump, Wall Street seems to have taken a breather. The Dow Industrials and S&P 500 indexes underwent their worst day in seven weeks on Oct 25. The S&P 500, NASDAQ Composite and Dow Jones Industrial Average lost about 0.5% each on that day (read: 5 Biggest ETF Winners of Trump Trade Resurgence).
The broader market had a great run since Trump announced plans for tax reform in late September. However, the double whammy of rising rates and subdued earnings weighed on the market recently, if we go by an article published on Reuters.
On Oct 25, 207, yield on 10-year benchmark Treasury yield was 2.44%. Yields have been on an uptrend on faster Fed policy-tightening projections. A prolonged source of easy money contributed to the eight-year long bull market greatly. Now, indications of fast ceases in easy dollars may cut the rally.
Plus, overvaluation concerns have been rife in the U.S. equity market for quite some time now. Though the ongoing earnings season has been pretty upbeat, investors probably have started analyzing to what extent this surge in earnings justify the inflated valuations, as per the Reuters article.
If this was not enough, lackluster earnings from AT&T (T - Free Report) (down 3.9%) weighed on indexes. Boeing (BA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Chipotle (CMG - Free Report) lost about 2.9%, 13.5% and 14.6% on Oct 25 as an aftershock of earnings or guidance disaster.
Amid all the upheavals, volatility levels flared up, with iPath S&P 500 VIX ST Futures ETN (VXX - Free Report) ) rising about 3.1% on Oct 25. These worries may keep the stock market volatile, giving investors a chance to ride it out through inverse ETFs. While there are several options available in the space, we have highlighted a few ETFs that are widely spread across a number of sectors and not concentrated on a particular sector or industry.
ETFs to Play
ProShares Short S&P500 ETF (SH - Free Report)
This fund provides unleveraged inverse exposure to the daily performance of the S&P 500 index (read: Politics & Geopolitics Loom: Short S&P 500 with These ETFs).
Direxion Daily S&P 500 Bear 1x Shares ETF (SPDN - Free Report)
The fund seeks daily investment results of 100% of the inverse (or opposite) of the performance of the S&P 500 Index.
ProShares Short Dow30 ETF (DOG - Free Report)
It offers inverse unleveraged exposure to the Dow Jones Industrial Average Index.
AdvisorShares Ranger Equity Bear ETF (HDGE - Free Report)
This ETF is active and does not track a benchmark. Its objective is capital appreciation through short sales of domestically traded equity securities.
Proshares Short QQQ (PSQ - Free Report)
It offers inverse unleveraged exposure to the NASDAQ-100 Index.
Bottom Line
As a caveat, investors should note that such products are suitable only for short-term traders as these are rebalanced on a daily basis (see: all the Inverse Equity ETFs here).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>