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Wall Street was downbeat, with the S&P 500, the Dow Jones and the Nasdaq losing 1.2%, 2% and 0.9%, respectively, last week. Among the economic datapoints, the release of U.S. jobs data was notable. The U.S. economy added 209,000 jobs in June 2023, following a downwardly revised 306,000 in May, and below market forecasts of 225,000.
It marked the lowest reading since December 2020, but was more than twice the 70,000-100,000 needed per month to continue with growth in the working-age population. Meanwhile, private sector jobs jumped by 497,000 in June, way ahead of the 267,000 gains in May and much better than the 220,000 estimate.
Non-farm employment has increased by an average of 278,000 per month over the first six months of 2023, lower than the average of 399,000 per month in 2022. The benchmark U.S. treasury yields jumped to 4.06% on Jul 7 (following an upbeat ADP job print), up from 3.86% recorded on Jul 3. The one-month U.S. treasury yield jumped to 5.32% on Jul 6, up from 5.27% recorded on Jul 3. The broader market took a dive on Jul 5 and 6 due to higher rates (read: Rates To Remain Higher For Longer? ETFs to Hedge the Trend).
However, the U.S. manufacturing sector has been facing a downturn, according to recent data released by the Institute for Supply Management (ISM) and S&P Global. Both reports showed that manufacturing activity in June contracted at a faster pace than in May (read: Should You At All Fear Weak Manufacturing? ETF Areas to Win).
Against this backdrop, below, we highlight a few inverse/leveraged ETFs that jumped last week.
ETFs in Focus
AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) ) – Up 25.3% last week
The AdvisorShares MSOS 2x Daily ETF looks to provide two times the return of AdvisorShares Pure US Cannabis ETF. Under the Biden administration, U.S. states have been putting efforts to decriminalize or legalize cannabis and its components, creating more opportunities for new and existing companies. Cannabis company Cronos Group (CRON - Free Report) informed about merger talks last week but indicated that it is early to confirm the deal. Before this, another company, Tolray, bought Hexo. In a nutshell, the space is consolidating.
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) ) – Up 17.3% last week
According to an article published on Investor’s Business Daily, sales of electric vehicles (EVs), specifically all-electric or battery electric vehicles (BEVs), will reach approximately 500,000 units during the initial half of 2023. This represents significant growth of 41% compared to the same period in the previous year. Such a number is strong enough to spark EV ETFs. Additionally, it is projected that the total EV sales in the United States in 2023 will exceed 1 million units, marking the first time such a milestone will be achieved.
ProShares UltraShort Bloomberg Natural Gas (KOLD - Free Report) ) – Up 16.5% last week
Natural gas dropped 7.7% for the week, marking the largest weekly decline since Jun 2. The sell-off was caused by a weekly Baker Hughes rig count report, which showed that the number of natural gas-targeted rigs jumped by 11 last week to 135. The data was a shocker for investors as there have been weekly declines in the gas rig count over the past six months due to low prices for the commodity.
GraniteShares 1.75x Long BABA Daily ETF (BABX - Free Report) ) – Up 15.4% last week
Alibaba (BABA - Free Report) shares jumped more than 2% last week. It launched Tongyi Wanxiang, which is an artificial intelligence tool that can generate images from prompts. Tongyi Wanxiang is Alibaba’s latest generative AI offering as tech giants in China and the United States have binged on this AI euphoria.
GraniteShares 1.5x Long Coinbase Daily ETF (CONL - Free Report) ) – Up 14.7% last week
Coinbase Global Inc’s (COIN) shares jumped 6.7% last week. The stock has gained strength due to BlackRock’s recent filing of a spot ETF application. The SEC has so far rejected more than 30 spot bitcoin ETF applications on concerns regarding fraud and market manipulation. BlackRock's filing includes a proposed surveillance sharing agreement between Nasdaq and an unnamed bitcoin trading platform, likely Coinbase (read: Why BlackRock ETF Filing Sent Bitcoin Surging).
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5 Winning Inverse/leveraged ETFs of Last Week
Wall Street was downbeat, with the S&P 500, the Dow Jones and the Nasdaq losing 1.2%, 2% and 0.9%, respectively, last week. Among the economic datapoints, the release of U.S. jobs data was notable. The U.S. economy added 209,000 jobs in June 2023, following a downwardly revised 306,000 in May, and below market forecasts of 225,000.
It marked the lowest reading since December 2020, but was more than twice the 70,000-100,000 needed per month to continue with growth in the working-age population. Meanwhile, private sector jobs jumped by 497,000 in June, way ahead of the 267,000 gains in May and much better than the 220,000 estimate.
Non-farm employment has increased by an average of 278,000 per month over the first six months of 2023, lower than the average of 399,000 per month in 2022. The benchmark U.S. treasury yields jumped to 4.06% on Jul 7 (following an upbeat ADP job print), up from 3.86% recorded on Jul 3. The one-month U.S. treasury yield jumped to 5.32% on Jul 6, up from 5.27% recorded on Jul 3. The broader market took a dive on Jul 5 and 6 due to higher rates (read: Rates To Remain Higher For Longer? ETFs to Hedge the Trend).
However, the U.S. manufacturing sector has been facing a downturn, according to recent data released by the Institute for Supply Management (ISM) and S&P Global. Both reports showed that manufacturing activity in June contracted at a faster pace than in May (read: Should You At All Fear Weak Manufacturing? ETF Areas to Win).
Against this backdrop, below, we highlight a few inverse/leveraged ETFs that jumped last week.
ETFs in Focus
AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) ) – Up 25.3% last week
The AdvisorShares MSOS 2x Daily ETF looks to provide two times the return of AdvisorShares Pure US Cannabis ETF. Under the Biden administration, U.S. states have been putting efforts to decriminalize or legalize cannabis and its components, creating more opportunities for new and existing companies. Cannabis company Cronos Group (CRON - Free Report) informed about merger talks last week but indicated that it is early to confirm the deal. Before this, another company, Tolray, bought Hexo. In a nutshell, the space is consolidating.
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV - Free Report) ) – Up 17.3% last week
According to an article published on Investor’s Business Daily, sales of electric vehicles (EVs), specifically all-electric or battery electric vehicles (BEVs), will reach approximately 500,000 units during the initial half of 2023. This represents significant growth of 41% compared to the same period in the previous year. Such a number is strong enough to spark EV ETFs. Additionally, it is projected that the total EV sales in the United States in 2023 will exceed 1 million units, marking the first time such a milestone will be achieved.
ProShares UltraShort Bloomberg Natural Gas (KOLD - Free Report) ) – Up 16.5% last week
Natural gas dropped 7.7% for the week, marking the largest weekly decline since Jun 2. The sell-off was caused by a weekly Baker Hughes rig count report, which showed that the number of natural gas-targeted rigs jumped by 11 last week to 135. The data was a shocker for investors as there have been weekly declines in the gas rig count over the past six months due to low prices for the commodity.
GraniteShares 1.75x Long BABA Daily ETF (BABX - Free Report) ) – Up 15.4% last week
Alibaba (BABA - Free Report) shares jumped more than 2% last week. It launched Tongyi Wanxiang, which is an artificial intelligence tool that can generate images from prompts. Tongyi Wanxiang is Alibaba’s latest generative AI offering as tech giants in China and the United States have binged on this AI euphoria.
GraniteShares 1.5x Long Coinbase Daily ETF (CONL - Free Report) ) – Up 14.7% last week
Coinbase Global Inc’s (COIN) shares jumped 6.7% last week. The stock has gained strength due to BlackRock’s recent filing of a spot ETF application. The SEC has so far rejected more than 30 spot bitcoin ETF applications on concerns regarding fraud and market manipulation. BlackRock's filing includes a proposed surveillance sharing agreement between Nasdaq and an unnamed bitcoin trading platform, likely Coinbase (read: Why BlackRock ETF Filing Sent Bitcoin Surging).