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Best Leveraged ETF Areas of Last Week

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Wall Street was extremely upbeat last week with the S&P 500 (up 2.82%), the Dow Jones (up 1.64%), the Nasdaq (up 3.87%) and the Russell 2000 (up 3.24%) offering stellar gains. The S&P 500 even hit the 4,000-mark last week. Solid U.S. economic data points led to this upsurge.

The March jobs data came in better than expected. Revisions added 156,000 jobs to the totals for January and February. The U.S. manufacturing index jumped to a 38-year high. Tech stocks were also bullish last week and were mainly responsible for the S&P 500’s achievement. The tech-heavy Nasdaq also benefited from the trend. Last week also witnessed President Joe Biden’s $2.3 trillion infrastructure plan (read: ETFs to Win on Biden's Infrastructure Plan).

While the fear for tax hikes also unnerved investors, talks are doing rounds that the actual hike may come across as less than what has been proposed by President Biden. Also, the President made it clear that the tax burden on anyone making less than $400,000 per year will not be increased. As a downside, COVID-19 cases have been rising globally.

Against this backdrop, below we highlight a few leveraged ETF areas that were winners last week.

ETF Areas in Focus

Semiconductors

By now, the global chip crunch is known to all. Investors should note that the rising work-learn-and-shop-from-home trend has boosted demand for tech gadgets and caused chip shortages. This along with a recent fire at a factory of one of the world’s leading Japanese auto chip makers Renesas Electronics Corp. aggravated long-standing worries about the global crunch of automotive semiconductors. Higher demand and lower supply, in turn, has boosted the prices of semiconductor stocks (read: Auto ETF Under Pressure on Renesas Chip-Plant Fire).

Semiconductor Bull 3X Direxion (SOXL - Free Report) – Up 29.3%         

Ultra Semiconductors Proshares (USD - Free Report) – Up 17.6%

Internet              

Tech stocks, mainly the Internet ones, have been in fine fettle. Tech companies did extremely well on the bourses last week as renewed COVID-19 fears brightened the appeal for stay-at-home stocks. Earnings growth potential for the same have also been upbeat for the space.

DJ Internet Bull 3X Direxion (WEBL - Free Report) – Up 15.9%

Microsectors Fang+ 3X ETN (FNGU - Free Report) – Up 15.6%

Homebuilding  

The housing sector is red hot and has entered the key spring selling season, which is considered the peak time for home sellers. Normally, the season starts in March and lasts through May-June thanks to warmer weather after a chilly winter and buyers’ tendency to move into a new house before the next school calendar starts.

Plus, demand is pretty high in the housing market currently that results in higher prices. Bubble fear is not in sight as lending standards are tighter, and buyers are putting down more cash. Mortgage rates have been subdued. Agreed, sales of existing and new homes were down slightly in February, but that was probably due to inclement weather (read: Can Housing ETFs Remain Red-Hot in 2021?).   

Homebuild & Suppliers Bull 3X Direxion (NAIL - Free Report) – Up 15.0%

China

Manufacturing activity in China jumped the maximum in three months in March as factories resumed production with renewed vigor after a Lunar New Year holiday.This factor probably acted as a tailwind for the Chinese market.

FTSE China Bull 3X Direxion (YINN - Free Report) – Up 13.7%

Energy

Last week, we saw the lingering effect of the Suez Canal blockage. A huge cargo ship Ever Given was stuck since Mar 23 and caused massive shipping disruptions. Energy commodities gained in prices from the incident as several ships waited in transit were carrying crude, refined products and liquified natural gas/liquified petroleum gas. Also, upbeat economic data points pointed to faster economic growth and higher demand for energy (read: ETFs to Win/Lose on Suez Canal Blockage).

 S&P Oil & Gas Exploration Bull 3X Direxion (GUSH - Free Report) – Up 11.9%

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