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Wall Street was upbeat last week. The S&P 500 managed to secure a weekly win after setting a new record on Thursday. The S&P 500 added 1.1% last week, the Dow Jones inched up 0.7% and the Nasdaq Composite added about 0.9%. This suggests resilience in the market, although uncertainties loom.
The tech-heavy Nasdaq Composite experienced a decline of nearly 0.4% on Friday, largely driven by Intel's disappointing first-quarter outlook. This setback has tempered some of the optimism generated by AI-related stocks that have been instrumental in pushing the market to record highs. Intel's shares took a huge hit, with its peers AMD and Nvidia also feeling the impact.
Inflation Gauge Indicates Moderation
The release of the PCE (Personal Consumption Expenditures) index for December provided further evidence of moderating inflation. The "Core" PCE, the Federal Reserve's preferred inflation measure, dropped below 3% on an annual basis, marking the slowest growth rate since March 2021.
This data, coupled with a stronger-than-expected initial estimate of fourth-quarter U.S. GDP, suggests the possibility of a "soft landing" for the US economy. The U.S. economy exhibited a robust performance in the fourth quarter of 2023, with the real Gross Domestic Product (GDP) expanding at an annualized rate of 3.3%. This growth exceeded market expectations of 2% and followed a 4.9% increase in the third quarter (read: U.S. GDP Growth Beats Expectations in Q4: ETFs to Benefit).
Earnings Reports Offer Insights
Investors also closely examined the latest batch of earnings reports. Colgate-Palmolive (CL - Free Report) stood out with robust fourth-quarter results attributed to its Latin American consumer markets. In contrast, Visa (V) delivered a cautious revenue growth forecast, raising concerns about a slowdown in U.S. payments volume growth, which could signal an impending economic downturn.
Meanwhile, Netflix (NFLX - Free Report) logged its best weekly performance in more than a year due to a better-than-expected earnings report. Tesla (TSLA - Free Report) , the electric vehicle (EV) manufacturer, released its Q4 earnings report on Jan 24, after the market closed, which missed estimates and led to a decline in its stock price. The company also provided a pessimistic outlook for full-year production in 2024.
ETFs in Focus
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
GraniteShares 2x Short TSLA Daily ETF (TSDD - Free Report) ) – Up 29.1%
The GraniteShares 1.5x Short TSLA Daily ETF seeks daily investment results, before fees and expenses, of -1.5 times the daily percentage change of the common stock of Tesla Inc.The expense ratio of the fun is 1.50%. Tesla lost 13.7% last week due to weak earnings report and guidance(read: Tesla Slumps on Q4 Earnings Miss and Soft Outlook: ETFs in Focus).
The AdvisorShares MSOS 2x Daily ETF seeks daily investment results that correspond to two times the return of AdvisorShares Pure US Cannabis ETF. The expense ratio of the fun is 1.13%. Cannabis stocks and ETFs have surged over the past few months since the Department of Health and Human Services asked the DEA to review its classification of cannabis. Earlier this month, a group of 12 state attorneys general sent a letter to the DEA supporting the reclassification (read: Cannabis ETFs: What's Behind the Latest Surge).
MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) ) – Up 16.8%
The MicroSectors U.S. Big Oil Index 3X Leveraged ETNs provide levered exposure to the Solactive MicroSectors U.S. Big Oil Index. U.S. crude oil topped $78 in best week since September on upbeat U.S. growth and China stimulus.
GraniteShares 2x Long BABA Daily ETF (BABX - Free Report) ) – Up 13.1%
The GraniteShares 1.75x Long BABA Daily ETF seeks daily investment results, before fees and expenses, of 1.75 times the daily percentage change of the common stock of Alibaba Group Holding Limited. The expense ratio of the fun is 1.15%. Alibaba stock price increased 6% last week.
Direxion Daily FTSE China Bull 3X Shares (YINN - Free Report) – Up 11.6%
The Direxion Daily FTSE China Bull 3X Shares seeks daily investment results, before fees and expenses, of 300% of the performance of the FTSE China 50 Index. The People’s Bank of China surprised investors on Wednesday by revealing a bigger-than-expected RRR cut weeks in advance, providing markets with a much-needed boost. China’s central bank also revealed broad plans to guide money into sectors of national importance to boost the faltering economy this year.
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Best Inverse/Leveraged ETFs of Last Week
Wall Street was upbeat last week. The S&P 500 managed to secure a weekly win after setting a new record on Thursday. The S&P 500 added 1.1% last week, the Dow Jones inched up 0.7% and the Nasdaq Composite added about 0.9%. This suggests resilience in the market, although uncertainties loom.
The tech-heavy Nasdaq Composite experienced a decline of nearly 0.4% on Friday, largely driven by Intel's disappointing first-quarter outlook. This setback has tempered some of the optimism generated by AI-related stocks that have been instrumental in pushing the market to record highs. Intel's shares took a huge hit, with its peers AMD and Nvidia also feeling the impact.
Inflation Gauge Indicates Moderation
The release of the PCE (Personal Consumption Expenditures) index for December provided further evidence of moderating inflation. The "Core" PCE, the Federal Reserve's preferred inflation measure, dropped below 3% on an annual basis, marking the slowest growth rate since March 2021.
This data, coupled with a stronger-than-expected initial estimate of fourth-quarter U.S. GDP, suggests the possibility of a "soft landing" for the US economy. The U.S. economy exhibited a robust performance in the fourth quarter of 2023, with the real Gross Domestic Product (GDP) expanding at an annualized rate of 3.3%. This growth exceeded market expectations of 2% and followed a 4.9% increase in the third quarter (read: U.S. GDP Growth Beats Expectations in Q4: ETFs to Benefit).
Earnings Reports Offer Insights
Investors also closely examined the latest batch of earnings reports. Colgate-Palmolive (CL - Free Report) stood out with robust fourth-quarter results attributed to its Latin American consumer markets. In contrast, Visa (V) delivered a cautious revenue growth forecast, raising concerns about a slowdown in U.S. payments volume growth, which could signal an impending economic downturn.
Meanwhile, Netflix (NFLX - Free Report) logged its best weekly performance in more than a year due to a better-than-expected earnings report. Tesla (TSLA - Free Report) , the electric vehicle (EV) manufacturer, released its Q4 earnings report on Jan 24, after the market closed, which missed estimates and led to a decline in its stock price. The company also provided a pessimistic outlook for full-year production in 2024.
ETFs in Focus
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
GraniteShares 2x Short TSLA Daily ETF (TSDD - Free Report) ) – Up 29.1%
The GraniteShares 1.5x Short TSLA Daily ETF seeks daily investment results, before fees and expenses, of -1.5 times the daily percentage change of the common stock of Tesla Inc.The expense ratio of the fun is 1.50%. Tesla lost 13.7% last week due to weak earnings report and guidance(read: Tesla Slumps on Q4 Earnings Miss and Soft Outlook: ETFs in Focus).
AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) ) – Up 16.9%
The AdvisorShares MSOS 2x Daily ETF seeks daily investment results that correspond to two times the return of AdvisorShares Pure US Cannabis ETF. The expense ratio of the fun is 1.13%. Cannabis stocks and ETFs have surged over the past few months since the Department of Health and Human Services asked the DEA to review its classification of cannabis. Earlier this month, a group of 12 state attorneys general sent a letter to the DEA supporting the reclassification (read: Cannabis ETFs: What's Behind the Latest Surge).
MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) ) – Up 16.8%
The MicroSectors U.S. Big Oil Index 3X Leveraged ETNs provide levered exposure to the Solactive MicroSectors U.S. Big Oil Index. U.S. crude oil topped $78 in best week since September on upbeat U.S. growth and China stimulus.
GraniteShares 2x Long BABA Daily ETF (BABX - Free Report) ) – Up 13.1%
The GraniteShares 1.75x Long BABA Daily ETF seeks daily investment results, before fees and expenses, of 1.75 times the daily percentage change of the common stock of Alibaba Group Holding Limited. The expense ratio of the fun is 1.15%. Alibaba stock price increased 6% last week.
Direxion Daily FTSE China Bull 3X Shares (YINN - Free Report) – Up 11.6%
The Direxion Daily FTSE China Bull 3X Shares seeks daily investment results, before fees and expenses, of 300% of the performance of the FTSE China 50 Index. The People’s Bank of China surprised investors on Wednesday by revealing a bigger-than-expected RRR cut weeks in advance, providing markets with a much-needed boost. China’s central bank also revealed broad plans to guide money into sectors of national importance to boost the faltering economy this year.