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Top-Performing Inverse/Leveraged ETF Areas of Last Week

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Wall Street was downbeat last week with the S&P 500 (down 2.4%), the Dow Jones (down 0.4%), the Nasdaq Composite (down 3.9%) and the Russell 2000 (down 0.2%) seeing loses. This happened on the likelihood of faster monetary policy tightening by the Federal Reserve.

Inflation reading came in red-hot while the job market looks steady. As a result, bond yields rose. The benchmark U.S. treasury yield jumped to 2.83% on Apr 14, 2022 from 2.39% recorded at the start of the month. Against this backdrop, below we highlight a few top-performing leveraged ETF areas of last week.

Natural Gas

Ultra Bloomberg Natural Gas ETF (BOIL - Free Report) – Up 31.3%           

Natural gas futures spiked to a fresh 13-year high on tight supply conditions, adverse weather conditions and declining inventories. With this, natural gas is up 65% so far this year. The jump in prices came as the conflict between Russia and Ukraine has sparked fears of global supply disruption in an already tight-supply market.

Western countries have slapped severe sanctions against Russia over Ukraine that has disrupted trade flows. Sanctions by the United States and other countries will force Russia to supply less natural gas, thereby pushing prices higher.

Inverse Growth Stocks

Microsectors Fang+ -3X ETN (FNGD - Free Report) – Up 20.5%

Microsectors Fang & Innovation -3X ETN (BERZ - Free Report) – Up 20.4%

Semiconductor Bear 3X Direxion (SOXS) – Up 16.3%

Technology Bear 3X Direxion (TECS) – Up 16.1%

S&P Biotech Bear 3X Direxion (LABD) – Up 13.6%

As there was a massive spike in long-term rates last week, growth investing took a beating. Growth stocks like technology, semiconductor and FAANGs underperform in a rising-rate environment. Biotech stocks too underperform due to sharp rise in rates last week.

Gold Miners

Microsectors Gold Miners 3X ETN (GDXU - Free Report) – Up 18.8%

Junior Gold Mine Bull 2X Direxion (JNUG - Free Report) – Up 16.8%

Gold investing has been in sweet spot lately. The safe-haven demand emanated from the Russia war brightened the appeal for the yellow metal. Plus, gold is viewed as an inflation-beating asset. Sky-high inflation is also driving investors toward this precious metal.

Inverse Treasury

20+ Year Treasury Bear 3X Direxion (TMV - Free Report) – Up 14.2%

Ultrapro Short 20 Year Treasury ETF (TTT - Free Report) – Up 14.1%

As long-term U.S. treasury yields rose last week on faster Fed rate hike bets, bond prices nosedived. This is because bond prices have an inverse relationship with yields.