Wall Street was downbeat last week, with losses seen in all major indexes. The S&P 500 recorded its longest weekly losing streak since the dot-com bubble burst,
per a Yahoo Finance article. The S&P 500 (down 3.1%), the Dow Jones (down 2.90%), the Nasdaq Composite (down 3.8%) and the Russel 2000 (down 1.1%) all shed gains.
Concerns that tighter monetary policies to tame surging inflation will slow down global economic growth have weighed on the risk sentiment and driven investors toward the safe-haven assets like U.S. treasuries.
iShares 20+ Year Treasury Bond ETF ( TLT Quick Quote TLT - Free Report) was up 2.3% past week.
Rising greenback weighed on corporate profits. Companies pointing to currency headwinds in their latest earnings reports include Coca-Cola Co, Procter & Gamble and Philip Morris International Inc. Analysts cut their overall forecast for S&P 500 second-quarter profit growth to 5.6% from 6.8% at the start of April owing to the current headwinds, per a Reuters article.
As far as benchmark U.S. treasury yields are concerned, the week started with a 2.88% yield, hit a high of 2.98% and ended at 2.78%. This happened because investors sought bonds’ safety amid renewed recessionary concerns. And due to a decline in the long-term bond yields, TLT gained last week.
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
The tech-heavy Nasdaq Composite had slipped into a bear market earlier this year, as traders dumped growth stocks due to rising rate concerns, which would weigh on high-flying tech stocks’ valuations. As of Friday’s close, the Nasdaq Composite had slumped about 30% from its record high from Nov 19, 2021.
DJ Internet Bear 3X Direxion (
WEBS Quick Quote WEBS - Free Report) – Up 15.4%
Ultrapro Short QQQ ETF (
SQQQ Quick Quote SQQQ - Free Report) – Up 11.99%
Microsectors Fang & Innovation -3X ETN (BERZ) – Up 9.9%
Microsectors Fang+ -3X ETN (FNGD) – Up 8.9%
Inverse S&P 500
The S&P 500 has been hovering around 20% below its recent record high, which would represent the index’s first bear market since the COVID-19 pandemic-induced crash in early 2020.
Ultrapro Short S&P500 ETF (
SPXU Quick Quote SPXU - Free Report) – Up 8.6%
S&P 500 Bear 3X Direxion (
SPXS Quick Quote SPXS - Free Report) – Up 8.4%
Ultrashort S&P500 ETF (SDS)– Up 5.7%
Inverse Dow Jones
The Dow Jones has slipped into a correction (meaning at least 10% from a recent record high).
Ultrapro Short Dow 30 Proshares (
SDOW Quick Quote SDOW - Free Report) – Up 8.1%
Ultrashort Dow30 ETF (
DXD Quick Quote DXD - Free Report) – Up 5.5% Inverse Leveraged Consumer Services
Weaker-than-expected earnings results and guidance from some of the major U.S. retailers indicated that companies were having more difficulty passing on rising costs to consumers. Inflation and supply chain disruptions have had on profitability of consumer companies.
Ultrashort Consumer Services ETF (
SCC Quick Quote SCC - Free Report) – Up 12% Leveraged Natural Gas
Natural gas futures spiked to a more than a decade high level on tight supply conditions, adverse weather conditions and declining inventories. The jump in prices came as the conflict between Russia and Ukraine sparked fears of global supply disruption in an already tight-supply market. Western countries have slapped severe sanctions against Russia over Ukraine, disrupting trade flows. Sanctions by the United States and other countries will force Russia to supply less natural gas, thereby pushing prices higher.
Ultra Bloomberg Natural Gas ETF (
BOIL Quick Quote BOIL - Free Report) – Up 11.1% Inverse Leveraged Financials
As long-term bond yields slumped, financial stocks lost gains as these fare better in a rising rate environment.
Financial Bear 3X Direxion (
FAZ Quick Quote FAZ - Free Report) – Up 3.8%
Ultrashort Financials ETF (SKF) – Up 2.5%