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Wall Street was upbeat last week, fueled by Nvidia's stellar earnings report. The S&P 500 added 1.7%, the Dow Jones advanced 1.3% and the Nasdaq gained 1.4% last week. The S&P 500 and the Dow Jones hit fresh records while the Nasdaq Composite ended Friday down slightly, marking a pause in the market's meteoric rise.
Nvidia's Ascendancy and Market Impact
Nvidia's blowout earnings report sent a spell of rejoice through Wall Street, propelling the AI chipmaker to new heights. The company's market value skyrocketed by $277 billion in a single day, marking the largest single-day gain in Wall Street history. With Nvidia's shares continuing to surge, the company is now on the brink of achieving a monumental $2 trillion valuation, solidifying its position as a dominant force in the semiconductor industry and a key player in the AI revolution.
Federal Reserve Signals on Interest Rates
Amidst the market frenzy, attention has turned to the Federal Reserve's stance on interest rates. While a parade of Fed officials has hinted at future rate cuts, they differ on the timing of such moves. Despite indications of impending cuts, investors are now reassessing their expectations, with Goldman Sachs revising its projections downward (per a Yahoo Finance article). The consensus now points to three rate cuts for 2024, down from previous expectations of six, as inflation data and cautious Fed comments prompt a recalibration of market forecasts.
Earnings Season Highlights and Market Reaction
As the fourth-quarter earnings season winds down, several companies have delivered standout performances, beating estimates and driving significant market movements. Among recent releases, Block's (SQ - Free Report) upbeat earnings forecast fueled a 16% surge in its shares, while Carvana's (CVNA - Free Report) announcement of its first annual profit propelled its stock up by approximately 30%. These positive earnings reports have contributed to the overall bullish sentiment in the market on Friday, reflecting investor optimism about the economic outlook.
Winning ETF Areas
Against this backdrop, below we highlight a few winning inverse/leveraged ETF areas of last week.
Nvidia-Heavy ETFs
GraniteShares 2x Long NVDA Daily ETF (NVDL - Free Report) ) – Up 14.7%
T-Rex 2X Long NVIDIA Daily Target ETF (NVDX - Free Report) ) – Up 14.6%
The semiconductor giant Nvidia exceeded Wall Street's fourth-quarter earnings and revenue expectations on Wednesday. This announcement not only showcased Nvidia's robust position in the AI chip market but also signaled promising prospects for the semiconductor industry in 2025 and beyond. The stock was up 6.4% last week, boosting the leveraged ETFs.
Cannabis stocks rose last week as Germany takes a huge step toward the broad legalization in Europe. Germany could become the largest country in Europe to legalize cannabis in 2024. German lawmakers on Friday approved a government plan to liberalize rules on cannabis, paving the way for the country to decriminalize limited amounts of marijuana and allow members of “cannabis clubs” to buy it for recreational purposes, and the move would take effect from April 1.
China
Direxion Daily FTSE China Bull 3X Shares (YINN - Free Report) ) – Up 13.1%
China ETFs have been gaining due to easy money policy. In January, China said that Starting Feb. 5, the People’s Bank of China will allow banks to hold smaller cash reserves, as quoted on CNBC. Cutting the reserve requirement ratio (RRR) by 50 basis points will likely to release 1 trillion yuan ($139.8 billion) in long-term capital (read: Will China ETFs Rebound in Year of Dragon?).
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) experienced a notable increase, climbing 4 points to reach 48 in February. This improvement marks the third successive month of positive sentiment in the housing market and represents the highest level of confidence since August 2023 (read: Homebuilders' Confidence Up for 3 Months in Row: ETFs in Focus).
Inverse Auto
MAX Auto Industry -3x Inverse Leveraged ETN (CARD - Free Report) ) – Up 8.8%
The stock Tesla lost 5.1% last week. Tesla has been witnessing weakness lately. In fact, the electric vehicle space has been under pressure for quite some time now. This has probably led to the surge in the inverse leveraged auto ETF.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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Best Inverse/Leveraged ETF Areas of Last Week
Wall Street was upbeat last week, fueled by Nvidia's stellar earnings report. The S&P 500 added 1.7%, the Dow Jones advanced 1.3% and the Nasdaq gained 1.4% last week. The S&P 500 and the Dow Jones hit fresh records while the Nasdaq Composite ended Friday down slightly, marking a pause in the market's meteoric rise.
Nvidia's Ascendancy and Market Impact
Nvidia's blowout earnings report sent a spell of rejoice through Wall Street, propelling the AI chipmaker to new heights. The company's market value skyrocketed by $277 billion in a single day, marking the largest single-day gain in Wall Street history. With Nvidia's shares continuing to surge, the company is now on the brink of achieving a monumental $2 trillion valuation, solidifying its position as a dominant force in the semiconductor industry and a key player in the AI revolution.
Federal Reserve Signals on Interest Rates
Amidst the market frenzy, attention has turned to the Federal Reserve's stance on interest rates. While a parade of Fed officials has hinted at future rate cuts, they differ on the timing of such moves. Despite indications of impending cuts, investors are now reassessing their expectations, with Goldman Sachs revising its projections downward (per a Yahoo Finance article). The consensus now points to three rate cuts for 2024, down from previous expectations of six, as inflation data and cautious Fed comments prompt a recalibration of market forecasts.
Earnings Season Highlights and Market Reaction
As the fourth-quarter earnings season winds down, several companies have delivered standout performances, beating estimates and driving significant market movements. Among recent releases, Block's (SQ - Free Report) upbeat earnings forecast fueled a 16% surge in its shares, while Carvana's (CVNA - Free Report) announcement of its first annual profit propelled its stock up by approximately 30%. These positive earnings reports have contributed to the overall bullish sentiment in the market on Friday, reflecting investor optimism about the economic outlook.
Winning ETF Areas
Against this backdrop, below we highlight a few winning inverse/leveraged ETF areas of last week.
Nvidia-Heavy ETFs
GraniteShares 2x Long NVDA Daily ETF (NVDL - Free Report) ) – Up 14.7%
T-Rex 2X Long NVIDIA Daily Target ETF (NVDX - Free Report) ) – Up 14.6%
The semiconductor giant Nvidia exceeded Wall Street's fourth-quarter earnings and revenue expectations on Wednesday. This announcement not only showcased Nvidia's robust position in the AI chip market but also signaled promising prospects for the semiconductor industry in 2025 and beyond. The stock was up 6.4% last week, boosting the leveraged ETFs.
Marijuana
AdvisorShares MSOS 2x Daily ETF (MSOX - Free Report) ) – Up 14.2%
Cannabis stocks rose last week as Germany takes a huge step toward the broad legalization in Europe. Germany could become the largest country in Europe to legalize cannabis in 2024. German lawmakers on Friday approved a government plan to liberalize rules on cannabis, paving the way for the country to decriminalize limited amounts of marijuana and allow members of “cannabis clubs” to buy it for recreational purposes, and the move would take effect from April 1.
China
Direxion Daily FTSE China Bull 3X Shares (YINN - Free Report) ) – Up 13.1%
China ETFs have been gaining due to easy money policy. In January, China said that Starting Feb. 5, the People’s Bank of China will allow banks to hold smaller cash reserves, as quoted on CNBC. Cutting the reserve requirement ratio (RRR) by 50 basis points will likely to release 1 trillion yuan ($139.8 billion) in long-term capital (read: Will China ETFs Rebound in Year of Dragon?).
Homebuilders
Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL - Free Report) ) – Up 10.3%
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) experienced a notable increase, climbing 4 points to reach 48 in February. This improvement marks the third successive month of positive sentiment in the housing market and represents the highest level of confidence since August 2023 (read: Homebuilders' Confidence Up for 3 Months in Row: ETFs in Focus).
Inverse Auto
MAX Auto Industry -3x Inverse Leveraged ETN (CARD - Free Report) ) – Up 8.8%
The stock Tesla lost 5.1% last week. Tesla has been witnessing weakness lately. In fact, the electric vehicle space has been under pressure for quite some time now. This has probably led to the surge in the inverse leveraged auto ETF.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)