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After recording a tumultuous week, Wall Street celebrated a triumph on Friday as tech stocks led a rally. But all three major U.S. equity indexes ended the week in negative territory due to lingering uncertainty surrounding the Federal Reserve's stance on interest rate cuts.
The S&P 500, the Dow Jones and the Nasdaq lost 1.0%, 2.3% and Nasdaq retreated 0.8% last week. However, despite these gains, the overall week witnessed losses across all three major indexes as investors reacted to statements from central bank officials that appeared to dampen confidence.
In economic news, March recorded a robust U.S. labor market performance, with employers adding 303,000 jobs— far surpassing economists' expectations — and the unemployment rate decreasing to 3.8%, in addition to meeting wage growth projections.
The market remained volatile throughout the week as investors navigated through economic indicators, corporate updates, and escalating tensions in the Middle East. The US manufacturing sector grew for the first time in one-and-a-half years. Such strong resilience of the U.S. economy lowered chances of sooner-than-expected Fed rate cuts, which in turn kept the broader market edgy (read: 4 Industry ETFs to Play as US Manufacturing Grows in 1.5 Years).
Oil prices remained near six-month highs on Apr 5, 2024, driven by concerns over potential disruptions in supply due to heightened tensions between Israel and Iran. Brent crude futures hovered just below $91 a barrel, while West Texas Intermediate futures traded at just under $87.
Meanwhile, Tesla Inc. (TSLA - Free Report) disappointed investors with its first year-over-year drop in quarterly deliveries since 2020. Global deliveries slumped to the lowest level in nearly two years on the back of worsening demand for electric vehicles (EVs), sparking concerns about the company’s growth prospects this year (read: Tesla Stock Sinks After a Big Q1 Delivery Miss: ETFs in Focus).
Best Inverse/Leveraged ETFs of Last Week
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
Gold is often viewed as a hedge against market risk. The metal has seen some strength lately thanks to the ongoing market turmoil. Since mining stocks often act as leveraged plays of the underlying metal, This leveraged gold mining ETF gained last week (read: 3 Safe-Haven ETFs to Add Health to Your Portfolio Now).
Silver is more of an industrial metal even though both gold and silver are regarded as safe-haven assets.With the U.S. economic growth on right track anduncertainties regarding rate cuts creating a volatility in the market silver prices had every reason to surge. Hence, like leveraged gold miners, leveraged silver miners too skyrocketed last week.
Wall Street was off to a shaky start in Q2. The S&P 500 and the Nasdaq are in the red so far this quarter. A rally in oil prices and lower chances of sooner-than-expected Fed rate cuts led to this massacre. A key Federal Reserve official signaled on Apr 4, 2024, that the central bank might not need to cut interest rates this year if inflation fails to make further progress toward the 2% target, per a Bloomberg article.
No wonder, volatility ETFs that track the implied volatility of the market. iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) has added about 8.9% last week. As a result, leveraged volatility ETF UVIX also advanced materially.
GraniteShares 2x Long META Daily ETF (FBL - Free Report) ) – Up 17.1%
Meta Platforms (META - Free Report) shares rose 8.4% in the past week. Meta's business and valuations are solid within the Magnificent Seven category. With a moderate Value score of “C” and a good Growth score of “B," the company’s shares are decently valued. Notably, Instagram is exhibiting faster growth compared to other platforms within Meta's social networking realm.
MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) ) – Up 15.9%
Oil prices surged recently to their highest levels since October as investors closely monitored escalating geopolitical tensions in key oil producing regions. Plus, chances of higher demand due to expected Fed and ECB rate cuts this year and moderate increase in oil supplies have supported oil and energy ETFs last week.
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Best Inverse/Leveraged ETFs of Last Week
After recording a tumultuous week, Wall Street celebrated a triumph on Friday as tech stocks led a rally. But all three major U.S. equity indexes ended the week in negative territory due to lingering uncertainty surrounding the Federal Reserve's stance on interest rate cuts.
The S&P 500, the Dow Jones and the Nasdaq lost 1.0%, 2.3% and Nasdaq retreated 0.8% last week. However, despite these gains, the overall week witnessed losses across all three major indexes as investors reacted to statements from central bank officials that appeared to dampen confidence.
In economic news, March recorded a robust U.S. labor market performance, with employers adding 303,000 jobs— far surpassing economists' expectations — and the unemployment rate decreasing to 3.8%, in addition to meeting wage growth projections.
The market remained volatile throughout the week as investors navigated through economic indicators, corporate updates, and escalating tensions in the Middle East. The US manufacturing sector grew for the first time in one-and-a-half years. Such strong resilience of the U.S. economy lowered chances of sooner-than-expected Fed rate cuts, which in turn kept the broader market edgy (read: 4 Industry ETFs to Play as US Manufacturing Grows in 1.5 Years).
Oil prices remained near six-month highs on Apr 5, 2024, driven by concerns over potential disruptions in supply due to heightened tensions between Israel and Iran. Brent crude futures hovered just below $91 a barrel, while West Texas Intermediate futures traded at just under $87.
Meanwhile, Tesla Inc. (TSLA - Free Report) disappointed investors with its first year-over-year drop in quarterly deliveries since 2020. Global deliveries slumped to the lowest level in nearly two years on the back of worsening demand for electric vehicles (EVs), sparking concerns about the company’s growth prospects this year (read: Tesla Stock Sinks After a Big Q1 Delivery Miss: ETFs in Focus).
Best Inverse/Leveraged ETFs of Last Week
Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.
MicroSectors Gold Miners 3X Leveraged ETN (GDXU - Free Report) ) – Up 21.9%
Gold is often viewed as a hedge against market risk. The metal has seen some strength lately thanks to the ongoing market turmoil. Since mining stocks often act as leveraged plays of the underlying metal, This leveraged gold mining ETF gained last week (read: 3 Safe-Haven ETFs to Add Health to Your Portfolio Now).
ProShares Ultra Silver (AGQ - Free Report) ) – Up 20.5%
Silver is more of an industrial metal even though both gold and silver are regarded as safe-haven assets.With the U.S. economic growth on right track anduncertainties regarding rate cuts creating a volatility in the market silver prices had every reason to surge. Hence, like leveraged gold miners, leveraged silver miners too skyrocketed last week.
2x Long VIX Futures ETF (UVIX - Free Report) ) – Up 19.7%
Wall Street was off to a shaky start in Q2. The S&P 500 and the Nasdaq are in the red so far this quarter. A rally in oil prices and lower chances of sooner-than-expected Fed rate cuts led to this massacre. A key Federal Reserve official signaled on Apr 4, 2024, that the central bank might not need to cut interest rates this year if inflation fails to make further progress toward the 2% target, per a Bloomberg article.
No wonder, volatility ETFs that track the implied volatility of the market. iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) has added about 8.9% last week. As a result, leveraged volatility ETF UVIX also advanced materially.
GraniteShares 2x Long META Daily ETF (FBL - Free Report) ) – Up 17.1%
Meta Platforms (META - Free Report) shares rose 8.4% in the past week. Meta's business and valuations are solid within the Magnificent Seven category. With a moderate Value score of “C” and a good Growth score of “B," the company’s shares are decently valued. Notably, Instagram is exhibiting faster growth compared to other platforms within Meta's social networking realm.
MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU - Free Report) ) – Up 15.9%
Oil prices surged recently to their highest levels since October as investors closely monitored escalating geopolitical tensions in key oil producing regions. Plus, chances of higher demand due to expected Fed and ECB rate cuts this year and moderate increase in oil supplies have supported oil and energy ETFs last week.