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5 Best Inverse/Leveraged ETF Areas of Last Week

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Wall Street was upbeat last week with the S&P 500 gaining 1.2%, the Dow Jones inching up 0.7% and the Nasdaq Composite adding 2.3%. The S&P 500 and the Dow Jones hit a record high on Friday as tech stocks jumped.

The S&P 500 and the Dow Jones Industrial Average reached record closing highs. The S&P 500 closed at 4,839 on Friday, marking its first record close since January 2022. The Dow Jones settled at 37,863, with over a 1% gain.

The Nasdaq Composite, known for its tech-heavy composition, was the top performer in percentage terms, closing at 15,310, a 1.7% increase. However, this is still below its record close of 16,057 from November 2021.

Positive retail sales data and favorable consumer sentiment reports have led investors to adjust their expectations for the Federal Reserve's interest rate policies, anticipating the first rate cut to be in May instead of March (read: Fed Rate Cut Bets Ease: 5 ETF Areas at a 52-Week High).

Notably, retail sales for the month increased by 0.6%, outperforming the Dow Jones estimate of 0.4%, as quoted on CNBC. Meanwhile, the University of Michigan’s Survey of Consumers showed a reading of 78.8 for January, its highest level since July 2021 (read: 4 ETF Areas & Stocks to Win on Upbeat December Retail Sales).

On a two-month basis, sentiment showed its largest increase since 1991, said Joanne Hsu, the survey’s director, as quoted on CNBC. Consumer sentiment has improved amid a drop in gasoline prices and solid stock market gains.

Big Tech Back in Focus

Investor attention has shifted back to Big Tech stocks, which have been fundamental drivers of market growth. The late 2023 rally's momentum appears to be sustained by continued investment in AI and other tech advancements.

According to Truist's co-CIO, as mentioned in a Yahoo Finance interview, the significant influence of seven major tech companies, often referred to as the "Magnificent Seven," is notable. These companies still hold about 30% weight in the S&P 500, indicating that the movement of these Big Tech stocks significantly impacts the overall market.

ETFs in Focus

Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.

Natural Gas

ProShares UltraShort Bloomberg Natural Gas (KOLD - Free Report) – Up 35%

Natural gas prices rose massively last week as cold weather gripped large parts of the United States. The severe weather conditions have not only led to higher demand but also reduced supplies, driving natural gas prices higher (read: Cold Snap Pushes Natural Gas ETFs Higher).


AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) – Up 20%

The AdvisorShares MSOS 2x Daily ETF seeks daily investment results that correspond to two times the return of AdvisorShares Pure US Cannabis ETF. The fund charges 113 bps in fees.

Multiple pot stocks jumped lately amid likely DEA rescheduling. This happened in early last week as one part of the government advised the other to tone down its stance on weed, as quoted on TipRanks.


Direxion Daily Semiconductor Bull 3x Shares (SOXL - Free Report) – Up 24.1%

ProShares Ultra Semiconductors (USD - Free Report) – Up 17.4%

Big tech stocks led the market higher last week following a bullish AI-fueled revenue outlook from TSMC (TSM), a key supplier to Apple and Nvidia (NVDA). The Taiwanese contract chipmaker's profit fell but beat Wall Street estimates. TSMC earnings results acted as a cornerstone for the entire semiconductor space as shares of AMD (AMD) and other chipmakers also surged in late last week.

Inverse Gold Miners

MicroSectors Gold Miners -3X Inverse Leveraged ETNs (GDXD - Free Report) – Up 22.6%

Direxion Daily Gold Miners Index Bear 2x Shares (DUST - Free Report) – Up 14.7%

Direxion Daily Junior Gold Miners Index Bear 2X Shares (JDST - Free Report) – Up 14.6%

Gold bullion ETF SPDR Gold Trust (GLD - Free Report) lost more than 1.4% last week due to the strength of the greenback. Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) gained about 1.1% last week. As the mining stocks act as leveraged plays of the underlying metal, this inverse/leveraged metal ETF jumped last week.

Broader Technology

MicroSectors Solactive FANG & Innovation 3X Leveraged ETN (BULZ - Free Report) – Up 12.6%

Direxion Daily Technology Bull 3X Shares (TECL - Free Report) – Up 12.3%         

Big tech led a stock market rally in late last week as Apple (AAPL - Free Report) experienced its best day on Thursday since May 2023. The surge in benchmark bond yields were pronounced last week but still investors pinned their hopes on Big Tech and boosted the broader tech space.


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