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Wall Street was downbeat last week. The S&P 500 (down 2.1%), the Dow Jones (down 1.7%), the Nasdaq Composite (down 2.7%) and the Russell 2000 (down 1.9%) — all lost last week. Amid major developments last week, the Fed’s rate hike deserves mention.
As expected, the Federal Reserve boosted its benchmark interest rate by 50 basis points last week. Fed Chair Jerome Powell reiterated the central bank's commitment to hike rates further in order to tame multi-decade highs in inflation. The latest rate hike took the benchmark rate to the range of 4.25% to 4.5%, its highest level in 15 years. However, the latest hike was lower than its previous four three-quarter-point hikes.
The policymakers also forecast that their key short-term rate will reach 5% to 5.25% by the end of 2023, before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by additional three-quarters of a point and then stay put until the end of 2023. This is quite expected as U.S. inflation is showing signs of peaking. In fact, the consumer price index (CPI) for November slowed to a one-year low.
Inflation in the United States is cooling down gradually, underscoring that the worst of inflation has likely passed. CPI jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a recent peak of 9.1% in June. This represents the lowest annual increase since late 2021 (read: ETFs to Benefit as Inflation Drops to One-Year Low).
Meanwhile, natural gas spiked last week and will likely rise further on forecasts of colder-than-normal weather. The cold snap is expected to peak on Christmas in most parts of the United States. The gains in natural prices came despite Freeport LNG's announcement last week (read: Cold Wave Forecast Sparks Rally in Natural Gas ETFs).
Against this backdrop, below we highlight a few inverse/leveraged ETFs that gained the most last week.
ETF Areas in Focus
Inverse Leveraged Real Estate
Real Estate Bear 3X Direxion (DRV - Free Report) – Up 8.7%
Ultrashort Real Estate ETF (SRS - Free Report) – Up 5.3%
Image: Bigstock
Best Inverse/Leveraged ETFs of Last Week
Wall Street was downbeat last week. The S&P 500 (down 2.1%), the Dow Jones (down 1.7%), the Nasdaq Composite (down 2.7%) and the Russell 2000 (down 1.9%) — all lost last week. Amid major developments last week, the Fed’s rate hike deserves mention.
As expected, the Federal Reserve boosted its benchmark interest rate by 50 basis points last week. Fed Chair Jerome Powell reiterated the central bank's commitment to hike rates further in order to tame multi-decade highs in inflation. The latest rate hike took the benchmark rate to the range of 4.25% to 4.5%, its highest level in 15 years. However, the latest hike was lower than its previous four three-quarter-point hikes.
The policymakers also forecast that their key short-term rate will reach 5% to 5.25% by the end of 2023, before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by additional three-quarters of a point and then stay put until the end of 2023. This is quite expected as U.S. inflation is showing signs of peaking. In fact, the consumer price index (CPI) for November slowed to a one-year low.
Inflation in the United States is cooling down gradually, underscoring that the worst of inflation has likely passed. CPI jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a recent peak of 9.1% in June. This represents the lowest annual increase since late 2021 (read: ETFs to Benefit as Inflation Drops to One-Year Low).
Meanwhile, natural gas spiked last week and will likely rise further on forecasts of colder-than-normal weather. The cold snap is expected to peak on Christmas in most parts of the United States. The gains in natural prices came despite Freeport LNG's announcement last week (read: Cold Wave Forecast Sparks Rally in Natural Gas ETFs).
Against this backdrop, below we highlight a few inverse/leveraged ETFs that gained the most last week.
ETF Areas in Focus
Inverse Leveraged Real Estate
Real Estate Bear 3X Direxion (DRV - Free Report) – Up 8.7%
Ultrashort Real Estate ETF (SRS - Free Report) – Up 5.3%
Inverse Leveraged Technology
Technology Bear 3X Direxion (TECS - Free Report) – Up 4.3%
Inverse Leveraged High Beta
S&P 500 High Beta Bear 3X Direxion (HIBS - Free Report) – Up 4.1%
Inverse Leveraged Travel
Bank of Montreal Microsectors Travel -3X Inverse (FLYD - Free Report) – Up 3.6%
Inverse Leveraged S&P 500
Ultrapro Short S&P500 ETF (SPXU - Free Report) – Up 3.5%