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The technology sector crash and faster prospects of rising rates at the Federal Reserve were among the major market movers in the last one month (as of Apr 24, 2018). The broader market was downbeat with the S&P 500 losing 0.9%, the Dow Jones Industrial Average shedding about 0.7% and the Nasdaq composite receding about 3%.
Understandably, many inverse or bear ETFs exceled in the last one month (as of Apr 24, 2018) as bulls found it hard to gain ground. For example, leveraged inverse S&P 500 fund ProShares UltraShort S&P500 (SDS - Free Report) gained about 1.2% in the last one month.
Against this backdrop, we would like to highlight three bear ETF areas that are currently trading at a one-month high.
Semiconductor
The global technology sector was under pressure in the last one month. A spate of threats emanating from Facebook’s data breaches and consequent concerns over stringent regulations over the social media space as well as massacre with Nvidia’s self-driving car tests hit the space hard (read: 5 Tech ETFs in Green Despite One-Month Turmoil).
To add to this, news and evidences of softer smartphone demand dealt a blow to the semiconductor industry this month. Taiwan Semiconductor Manufacturing Co Ltd (TSM - Free Report) pointed at a decline in smartphone demand on Apr 19 after the company reported Q1 results before market open.
The company’s revenue forecast target for the second quarter came in the range of $7.8 billion to $7.9 billion, falling shy of the analysts’ expectation of $8.8 billion. The International Monetary Fund (IMF) too said that saturation in demand in developed markets and lengthening of upgrade cycles are weighing on overall smartphone sales (read: 4 ETF Areas Under Watch on Waning Smartphone Demand).
This has given a boost to Direxion Daily Semiconductor Bear 3X Shares (SOXS - Free Report) in the last one month, helping it to gain about 29.4%.
Emerging Markets
As the 10-year benchmark U.S. Treasury yield spiked to 3% on Apr 24 for the first time since January 2014 on chances of four Fed rate hikes and a flurry of new debt issuances, emerging markets fell out of investors’ favor. ProShares UltraShort MSCI Emerging Markets (EEV - Free Report) (up 7% in the last one month) and ProShares Short MSCI Emerging Markets (EUM - Free Report) (up 3.7% in the last one month) are now at a one-month high.
U.S. Treasury
Bond yields and price move in different directions. So, for a valid reason, inverse Treasury bond ETFs performed better in recent sessions.
Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV - Free Report) (up 3.9% in the last one month), ProShares UltraPro Short 20+ Year Treasury (TTT - Free Report) (up 4% in the last one month) and ProShares UltraShort 20+ Year Treasury (TBT - Free Report) (up 2.7% in the last one month) also hit their one-month high on Apr 24.
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3 Bear ETF Areas at One-Month High
The technology sector crash and faster prospects of rising rates at the Federal Reserve were among the major market movers in the last one month (as of Apr 24, 2018). The broader market was downbeat with the S&P 500 losing 0.9%, the Dow Jones Industrial Average shedding about 0.7% and the Nasdaq composite receding about 3%.
Understandably, many inverse or bear ETFs exceled in the last one month (as of Apr 24, 2018) as bulls found it hard to gain ground. For example, leveraged inverse S&P 500 fund ProShares UltraShort S&P500 (SDS - Free Report) gained about 1.2% in the last one month.
Against this backdrop, we would like to highlight three bear ETF areas that are currently trading at a one-month high.
Semiconductor
The global technology sector was under pressure in the last one month. A spate of threats emanating from Facebook’s data breaches and consequent concerns over stringent regulations over the social media space as well as massacre with Nvidia’s self-driving car tests hit the space hard (read: 5 Tech ETFs in Green Despite One-Month Turmoil).
To add to this, news and evidences of softer smartphone demand dealt a blow to the semiconductor industry this month. Taiwan Semiconductor Manufacturing Co Ltd (TSM - Free Report) pointed at a decline in smartphone demand on Apr 19 after the company reported Q1 results before market open.
The company’s revenue forecast target for the second quarter came in the range of $7.8 billion to $7.9 billion, falling shy of the analysts’ expectation of $8.8 billion. The International Monetary Fund (IMF) too said that saturation in demand in developed markets and lengthening of upgrade cycles are weighing on overall smartphone sales (read: 4 ETF Areas Under Watch on Waning Smartphone Demand).
This has given a boost to Direxion Daily Semiconductor Bear 3X Shares (SOXS - Free Report) in the last one month, helping it to gain about 29.4%.
Emerging Markets
As the 10-year benchmark U.S. Treasury yield spiked to 3% on Apr 24 for the first time since January 2014 on chances of four Fed rate hikes and a flurry of new debt issuances, emerging markets fell out of investors’ favor. ProShares UltraShort MSCI Emerging Markets (EEV - Free Report) (up 7% in the last one month) and ProShares Short MSCI Emerging Markets (EUM - Free Report) (up 3.7% in the last one month) are now at a one-month high.
U.S. Treasury
Bond yields and price move in different directions. So, for a valid reason, inverse Treasury bond ETFs performed better in recent sessions.
Direxion Daily 20+ Year Treasury Bear 3X Shares (TMV - Free Report) (up 3.9% in the last one month), ProShares UltraPro Short 20+ Year Treasury (TTT - Free Report) (up 4% in the last one month) and ProShares UltraShort 20+ Year Treasury (TBT - Free Report) (up 2.7% in the last one month) also hit their one-month high on Apr 24.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>