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Wall Street was mixed last week due to tepid earnings and moderate interest rate backdrop. The S&P 500, the Dow Jones and the Russell 2000 lost about 0.7%, 2.7% and 1%, respectively last week. However, the tech-heavy Nasdaq Composite was 0.6%. As far as the benchmark U.S. treasury yield is concerned, the week started at 3.49% (hit a weekly high and low of 3.53% and 3.37%, respectively) and ended at 3.48%. Growth stocks staged a comeback on chances of lower bond yields.
The yields occasionally fell because U.S. producer prices dropped in December by the maximum since the start of the pandemic, continuing a months-long cooling in inflationary pressures and giving the Federal Reserve a leeway to slow the pace of interest-rate hikes.
Retail sales, too, came in soft. Sales in the United States fell 1.1% sequentially in December 2022, following an upwardly revised 1% decline in November and worse than forecasts of a 0.8% fall. Year-over-year, retail sales grew 9.2% (read: ETFs & Stocks to Win Despite a Soft December Retail Sales).
However, banking earnings were not satisfactory. The fourth quarter earnings season for the S&P 500 is not off to a great start. To date, the number and magnitude of positive earnings surprises reported by S&P 500 companies are below their 5-year and 10-year averages, per FactSet.
Against this backdrop, below we highlight a few leveraged ETF areas that gained the most last week.
Bitcoin surged last week amid optimism that it may have bottomed. Talks that inflation has peaked and will exhibit a downtrend in 2023 are doing rounds. This has bolstered risk-on trade sentiments and favored the beaten-down asset cryptocurrency.
As rates dived last week, growth stocks gained. FANG stocks were heavily beaten-down last year but bucked the losing trend to start 2023 as these perform better in a low-rate environment.
High Beta
S&P 500 High Beta Bull 3X Direxion (HIBL - Free Report) – Up 10.2%
The underlying S&P 500 High Beta Index selects 100 securities from the S&P 500 Index that have the highest sensitivity to beta over the past 12 months. The recent uptick in the risk-on sentiments favored the high beta investing.
The MicroSectors Travel 3x Leveraged ETN is linked to three-times leveraged participation in the performance of the MerQube MicroSectors U.S. Travel Index, compounded daily, minus the applicable fees. The index is a total return index that tracks the stock prices of U.S. domiciled and listed securities that are materially engaged in specified segments of the travel industry. The reopening of China’s economy probably has led to gains in travel shares.
After a $3.9 trillion rout, Chinese stocks have staged a strong comeback this year. The MSCI China Index, which tracks more than $2 trillion of Chinese stocks listed home and abroad, has risen 12.4% in the initial weeks of 2023, marking the best start to a year since 1996.
The rally has been driven by a rebound in investor sentiment after China reopened following three years of a strict zero-COVID policy and Beijing’s pledge for additional policy support to boost the ailing domestic economy (read: 5 ETFs Riding Higher on a China Stock Rally).
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Best Leveraged ETF Areas of Last Week
Wall Street was mixed last week due to tepid earnings and moderate interest rate backdrop. The S&P 500, the Dow Jones and the Russell 2000 lost about 0.7%, 2.7% and 1%, respectively last week. However, the tech-heavy Nasdaq Composite was 0.6%. As far as the benchmark U.S. treasury yield is concerned, the week started at 3.49% (hit a weekly high and low of 3.53% and 3.37%, respectively) and ended at 3.48%. Growth stocks staged a comeback on chances of lower bond yields.
The yields occasionally fell because U.S. producer prices dropped in December by the maximum since the start of the pandemic, continuing a months-long cooling in inflationary pressures and giving the Federal Reserve a leeway to slow the pace of interest-rate hikes.
Retail sales, too, came in soft. Sales in the United States fell 1.1% sequentially in December 2022, following an upwardly revised 1% decline in November and worse than forecasts of a 0.8% fall. Year-over-year, retail sales grew 9.2% (read: ETFs & Stocks to Win Despite a Soft December Retail Sales).
However, banking earnings were not satisfactory. The fourth quarter earnings season for the S&P 500 is not off to a great start. To date, the number and magnitude of positive earnings surprises reported by S&P 500 companies are below their 5-year and 10-year averages, per FactSet.
Against this backdrop, below we highlight a few leveraged ETF areas that gained the most last week.
Cryptocurrency
Graniteshares Coinbase 1.5X Daily ETF (CONL - Free Report) – Up 17.3%
Bitcoin surged last week amid optimism that it may have bottomed. Talks that inflation has peaked and will exhibit a downtrend in 2023 are doing rounds. This has bolstered risk-on trade sentiments and favored the beaten-down asset cryptocurrency.
FANG+
Microsectors Fang+ 3X ETN (FNGU - Free Report) – Up 14.0%
Microsectors Fang & Innovation 3X ETN (BULZ - Free Report) – Up 11.6%
Microsectors Fang+ 2X ETN (FNGO) – Up 9.9%
As rates dived last week, growth stocks gained. FANG stocks were heavily beaten-down last year but bucked the losing trend to start 2023 as these perform better in a low-rate environment.
High Beta
S&P 500 High Beta Bull 3X Direxion (HIBL - Free Report) – Up 10.2%
The underlying S&P 500 High Beta Index selects 100 securities from the S&P 500 Index that have the highest sensitivity to beta over the past 12 months. The recent uptick in the risk-on sentiments favored the high beta investing.
Travel
Microsectors Travel 3X ETN (FLYU - Free Report) – Up 8.7%
The MicroSectors Travel 3x Leveraged ETN is linked to three-times leveraged participation in the performance of the MerQube MicroSectors U.S. Travel Index, compounded daily, minus the applicable fees. The index is a total return index that tracks the stock prices of U.S. domiciled and listed securities that are materially engaged in specified segments of the travel industry. The reopening of China’s economy probably has led to gains in travel shares.
China
FTSE China Bull 3X Direxion (YINN - Free Report) – Up 7.2%
After a $3.9 trillion rout, Chinese stocks have staged a strong comeback this year. The MSCI China Index, which tracks more than $2 trillion of Chinese stocks listed home and abroad, has risen 12.4% in the initial weeks of 2023, marking the best start to a year since 1996.
The rally has been driven by a rebound in investor sentiment after China reopened following three years of a strict zero-COVID policy and Beijing’s pledge for additional policy support to boost the ailing domestic economy (read: 5 ETFs Riding Higher on a China Stock Rally).