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Top Leveraged ETFs of Last Week

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The last week was downbeat for Wall Street with the S&P 500 losing about 2.9%, the Nasdaq shedding about 1.9% and the Dow Jones retreating 3.3%. In fact, on Jun 24, Wall Street logged its worst dailyand percentage decline since Jun 11, according to Dow Jones Market Data.

The reason behind the market drop was the rise in coronavirus cases with easing lockdown measures. New York, New Jersey and Connecticut announced 14-day quarantines on Jun 24 on visitors from states with high COVID-19 infection rates.

The “travel advisory,” which majorly impacts residents of nine states, triggered concerns about the momentum of business activities that have just started to take off in the post-lockdown period. The 7-day average of daily new COVID-19 cases increased more than 30% compared with a week ago, according to a CNBC analysis of Johns Hopkins University data.

Rise in cases are most rife in states like Texas, Florida, Arizona and California. Texas governor Greg Abbott advised all the state’s residents to stay home. Hospitalization rates are surging in some areas. Chicago Fed President Charles Evans said the U.S. economy may be in need for more monetary stimulus, due to low inflation, which is posing risks of further weakness.

Against this backdrop, below we highlight a few leverage ETF areas that topped last week.

Gold Miners

Gold prices spiked to the highest level in nearly eight years on coronavirus fears. Goldman Sachs predicts a $2,000/ounce gold price within 12 months. A dovish Fed and the resultant weakness in the greenback, fear of a second wave of coronavirus, and higher levels of economic uncertainty boosted the demand for this safe-haven metal and the related mining stocks too. Cheap oil is also favoring gold mining ETFs as oil is an input for miners (read: Get Ready For A Gold Rush: ETFs In Focus).

Direxion Daily Junior Gold Miners Bull 2X ETF (JNUG - Free Report) (up 11.8%)and Direxion Daily Gold Miners Bull 2x Shares (NUGT - Free Report) (up 1.09%) are the top-performing ETFs in this segment. Gold bullion fund VelocityShares 3x Long Gold ETN added 4.8% last week.

Treasury

As the safe-haven rally flexed muscle last week, U.S. treasury ETFs surged. The yield on benchmark U.S. treasury ETFs was 0.64% on Jun 26 versus 0.71% at the start of the week. This led to the strength of the U.S. treasury funds. Direxion 20+ Year Treasury Bull and Bear 3X ETF (TMF - Free Report) (up 5.31%) and ProShares Ultra 20+ Year Treasury ((UBT - Free Report) (up 3.5%) gained the most last week.

India

The Indian market ended higher last week led by the gains in Infosys and HDFC Bank. Some upbeat quarterly results drove the border market. India Bull 3X ETF (INDL - Free Report) added 4.1% last week.

Biotech

Biotech stocks are soaring on hopes of vaccines or treatments to fight the novel coronavirus disease.The World Health Organization has recognized some 10 prime candidates for potential COVID-19 vaccines as these have entered clinical trials.

Plus, more than 100 candidate vaccines were in preclinical evaluation stage a month ago. While mRNA-1273 vaccine by Moderna Inc. (MRNA - Free Report)  is apparently leading the vaccine race, Novavax (NVAX - Free Report) has started human testing of its coronavirus vaccine candidate, and expects preliminary results for the trial in July. Direxion Daily S&P Biotech Bull 3x Shares (LABU - Free Report) added 3.5% last week.

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