Wall Street, which had a pretty strong start to this year, was hit by recessionary fears on Friday. Per Refinitiv Tradeweb data, the spread between the three-month Treasury bill and the 10-year note rate turned negative — though briefly —
for the first time since 2007, per CNBC.com. This increased fears of a recession in the United States. Also, global growth worries have been a nagging concern for quite some time. SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) , SPDR Dow Jones Industrial Average ETF ( DIA Quick Quote DIA - Free Report) , Invesco QQQ Trust ( QQQ Quick Quote QQQ - Free Report) and iShares MSCI ACWI ETF ( ACWI Quick Quote ACWI - Free Report) lost about 1.9%, 1.8%, 2.2% and 2.1% on Mar 22.
We also believe that overvaluation concerns caused this sharp selloff. Market was “
up about 20 percent from Christmas Eve’s bottom”, thus calling for some correction amid the Brexit drama, Chinese economic slowdown and prevalent global growth issues. VIDEO How to Profit
Given the upheaval, investors could easily tap the opportunity by going short on global equities, at least for the near term. Below we highlight a few of them.
Investors intending to play against the tumbling Dow Jones, may tap
ProShares Short Dow 30 ( DOG Quick Quote DOG - Free Report) (up 1.8% on Mar 22), ProShares UltraShort Dow30 DXD (up 3.5% on Mar 22) and ProShares UltraPro Short Dow30 SDOW (up 5.3% on Mar 22). S&P 500
Investors can go against the S&P 500 with
ProShares Short S&P500 ETF ( SH Quick Quote SH - Free Report) (up 1.9% on Mar 22) and Direxion Daily S&P 500 Bear 1X Shares SPDN (up 1.3% on Mar 22). Nasdaq ProShares Short QQQ ( PSQ Quick Quote PSQ - Free Report) (up 2.2% on Mar 22), ProShares UltraShort QQQ ">QID) (up 4.4% on Mar 22) and ProShares UltraPro Short QQQ SQQQ (up 6.7% on Mar 22) are good to play against the Nasdaq. Small-Cap
One can short small-cap U.S. equities with
ProShares Short Small Cap 600 ( (up 3.5% on Mar 22), SBB Quick Quote SBB - Free Report) ProShares Short Russell2000 RWM (up 3.6% on Mar 22) and ProShares UltraPro Short Russell2000 ( SRTY Quick Quote SRTY - Free Report) (up 11.1% on Mar 22). Financials
Financial stocks took a jump amid yield curve concerns.
ProShares Short Financials ETF ( SEF Quick Quote SEF - Free Report) (up 2.1% on Mar 22), ProShares UltraShort Financials SKF (up 4.5%) and ProShares UltraPro Short Financial Select Sector ETF FINZ (up 8.3%) are the ways to tap this drop. EAFE ProShares Short MSCI EAFE ( EFZ Quick Quote EFZ - Free Report) (up 2.2% on Mar 22) could be a good way to short stocks from the EAFE region and avoid the spillover effect of global recessionary fear. Emerging Market
The Wall Street selloff has definitely hurt emerging markets — a volatile corner. In fact, Turkey’s lira was one of the worst performers against the greenback on Mar 22. For this segment, investors have inverse ETF options like
Direxion Daily Emerging Markets Bear 3X Shares ( EDZ Quick Quote EDZ - Free Report) (up 8.8% on Mar 22) and Short MSCI Emerging Markets ProShares EUM (up 3% on Mar 22). Bottom Line As a caveat, investors should note that such products are suitable only for short-term traders as these are rebalanced on a daily basis (see: all the Inverse Equity ETFs here). Want key ETF info delivered straight to your inbox?
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