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Best Inverse/Leveraged ETFs of Last Week

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Wall Street was downbeat last week with the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 losing about 3.3%, 3%, 4.2% and 4.7%, respectively. New York Fed President John Williams recently said he expects interest rates to continue higher and to remain at those levels until inflation is controlled, as quoted on CNBC. Fed chief Powell too recently commented that taming U.S. inflation will cause "pain" for American families and businesses as rate hikes will continue.

As rising rate worries have been prevalent with the Fed hiking rates faster and fatter this year, both the bond and stock investing are at worse. The Federal Reserve raised the target range for the fed funds rate by 75bps to 2.25%-2.5% during its July 2022 meeting, marking the fourth consecutive rate hike. Per CME group as of Sep 3, 2022 there is 57% probabilities of a 75-bp rate hike in the September meeting while 43% probability is of a 50-bp rate hike.

The United States added 315,000 jobs in August as companies keep hiring albeit at slower clip. The government reported Friday that last month's job gain was down from 526,000 in July and below the average gain of the previous three months. The unemployment rate jumped to 3.7%, two-tenths of a percentage point higher than expectations. Wages also rose, with average hourly earnings up 5.2% from a year ago, slightly lower than the estimate.

Against this backdrop, below we highlight a few inverse/leveraged ETFs of last week that gained handsomely (read: Top ETF Stories of August).

ETFs In Focus

Inverse Leveraged Semiconductors

The semiconductor sector was hit hard as the biggie Nvidia lost about 13.6% last week. Weak earnings, feeble guidance and news that the U.S. government told Nvidia to stop exporting top artificial intelligence (“AI”) chips to China and Russia led to the slump in Nvidia shares.

Semiconductor Bear 3X Direxion (SOXS - Free Report) – Up 23.5%

Ultrashort Semiconductors ETF (SSG - Free Report) -- Up 19.2%

AXS 1.25X NVDA Bear Daily ETF (NVDS) – Up 23%

Inverse Leveraged Technology

As rising rate worries took an upper hand last week, growth sectors like technology lost momentum. As a result, tech and internet stocks lost steam last week

Microsectors Fang & Innovation -3X ETN (BERZ) – Up 16.6%

Technology Bear 3X Direxion (TECS - Free Report) – Up 16.4%

Microsectors Fang+ -3X ETN (FNGD) – Up 14.7%

Inverse Small-Caps

As recessionary fears grew louder as evident from the inversion of the U.S. treasury yield curve, small-cap stocks failed to impress investors. This is especially true given small-caps more domestic exposure.

Smallcap Bear 3X Direxion (TZA - Free Report) – Up 15.2%

Ultrapro Short Russell 2000 ETF (SRTY - Free Report) – Up 15.2%

Inverse China

Chinese stocks won last to last week on news of stimulus measures. China boosted its economic stimulus with a further one trillion yuan ($146 billion) of measures to promote growth and limit the fallout of Covid lockdowns and the debacle in the property market. That is why, Chinese equities probably lost last week on profit booking.

FTSE China Bear 3X Direxion (YANG - Free Report) – Up 14.2%

 

 


 

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