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Wall Street was downbeat last week due to mounting inflationary pressures, rising rate worries and geopolitical tensions. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000, declined 1.6%, 1.9%, 1.8% and 1.0%, respectively.
As far as rates are concerned, the benchmark treasury yield started the week with 1.98%, hit a high of 2.05% and then closed the week at 1.92%. Increasing chances of Russian invasion of Ukraine led to the rise in safe-haven demand, which in turn dragged down U.S. treasury yields and boosted the price safe-haven U.S. government bonds.
Against this backdrop, below we highlight a few inverse/leveraged ETF areas that won last week.
Natural Gas
Ultra Bloomberg Natural Gas ETF (BOIL - Free Report) – Up 19.7%
Natural gas has been gaining this year. It is already up 23.4% in 2022. If Russia tensions grow, gas prices in Europe — which soared to new highs last year — will go up further, per Capital Economics, quoted a CNBC article. Russia is the provider of about 35% of Europe’s gas. Europe is highly dependent on Russia for energy, importing about 40% of its energy requirement. In the Unted States, the colder weather has also boosted the price.
As gold bullion ETF GLD gained 1.4% last week on its safe-haven appeal. Gold prices shot up last week due to a fall in rates triggered by a safe-haven demand. Also, rising inflation helped gold prices to rally as the yellow metal is viewed as an inflation-hedging asset. Since mining companies act as a leveraged products of the underlying metal, GDXU gained handsomely.
Inverse Marijuana
Etfmg 2X Daily Inverse Alternative Harvest ETF – Up 16.9%
Cannabis ETFs had made a solid comeback last to last week. The re-introduction and passing of the Secure and Fair Enforcement Banking Act in the House of Representatives and discussion around other cannabis-related bills had led to the jump, said AdvisorShares’ Dan Ahrens, as quoted on CNBC. Part of the America Competes Act, the SAFE Banking Act would give cannabis companies access to financial institutions and capital markets, was a plus for the sector.
However, no further improvement in the investing scenario of marijuana and short-term profit booking led to a crash in pot prices. As a result, inverse leveraged marijuana ETF MJIN gained smartly last week.
Inverse Cloud Computing
Direxion Daily Cloud Computing Bear 2X Shares – Up 14.3%
The tech-heavy Nasdaq has been un-steady in recent times. No wonder, cloud stocks took a beating. Cloud computing was a winning proposition of the COVID-led lockdowns. With cues that the United States is done with lockdowns and with COVID-19 scenario improving, cloud computing followed the suit of tech slump.
Inverse Financials
Microsectors -3X U.S. Big Banks ETN (BNKD - Free Report) – Up 11.9%
Banks are beneficiaries of rising rates. As banks seek to borrow money at short-term rates and lend at long-term rates, a steepening yield curve earns more on lending and pays less on deposits, thereby leading to a wider spread. This expands net margins and increases banks’ profits. But benchmark rates declined considerably last week, casting a pall over bank ETFs.
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5 Best Inverse/Leveraged ETF Areas of Last Week
Wall Street was downbeat last week due to mounting inflationary pressures, rising rate worries and geopolitical tensions. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000, declined 1.6%, 1.9%, 1.8% and 1.0%, respectively.
As far as rates are concerned, the benchmark treasury yield started the week with 1.98%, hit a high of 2.05% and then closed the week at 1.92%. Increasing chances of Russian invasion of Ukraine led to the rise in safe-haven demand, which in turn dragged down U.S. treasury yields and boosted the price safe-haven U.S. government bonds.
Against this backdrop, below we highlight a few inverse/leveraged ETF areas that won last week.
Natural Gas
Ultra Bloomberg Natural Gas ETF (BOIL - Free Report) – Up 19.7%
Natural gas has been gaining this year. It is already up 23.4% in 2022. If Russia tensions grow, gas prices in Europe — which soared to new highs last year — will go up further, per Capital Economics, quoted a CNBC article. Russia is the provider of about 35% of Europe’s gas. Europe is highly dependent on Russia for energy, importing about 40% of its energy requirement. In the Unted States, the colder weather has also boosted the price.
Gold Miners
Microsectors Gold Miners 3X ETN (GDXU - Free Report) – Up 17.9%
As gold bullion ETF GLD gained 1.4% last week on its safe-haven appeal. Gold prices shot up last week due to a fall in rates triggered by a safe-haven demand. Also, rising inflation helped gold prices to rally as the yellow metal is viewed as an inflation-hedging asset. Since mining companies act as a leveraged products of the underlying metal, GDXU gained handsomely.
Inverse Marijuana
Etfmg 2X Daily Inverse Alternative Harvest ETF – Up 16.9%
Cannabis ETFs had made a solid comeback last to last week. The re-introduction and passing of the Secure and Fair Enforcement Banking Act in the House of Representatives and discussion around other cannabis-related bills had led to the jump, said AdvisorShares’ Dan Ahrens, as quoted on CNBC. Part of the America Competes Act, the SAFE Banking Act would give cannabis companies access to financial institutions and capital markets, was a plus for the sector.
However, no further improvement in the investing scenario of marijuana and short-term profit booking led to a crash in pot prices. As a result, inverse leveraged marijuana ETF MJIN gained smartly last week.
Inverse Cloud Computing
Direxion Daily Cloud Computing Bear 2X Shares – Up 14.3%
The tech-heavy Nasdaq has been un-steady in recent times. No wonder, cloud stocks took a beating. Cloud computing was a winning proposition of the COVID-led lockdowns. With cues that the United States is done with lockdowns and with COVID-19 scenario improving, cloud computing followed the suit of tech slump.
Inverse Financials
Microsectors -3X U.S. Big Banks ETN (BNKD - Free Report) – Up 11.9%
Banks are beneficiaries of rising rates. As banks seek to borrow money at short-term rates and lend at long-term rates, a steepening yield curve earns more on lending and pays less on deposits, thereby leading to a wider spread. This expands net margins and increases banks’ profits. But benchmark rates declined considerably last week, casting a pall over bank ETFs.