Top-Performing Inverse/Leveraged ETFs of Last Week

U.S. stocks registered the best week of the year for major indexes last week. Read More...

U.S. stocks registered the best week of the year for major indexes last week. The S&P 500 advanced 3.9% last week, the Dow Jones recorded 2.9% gains, and the Nasdaq Composite was up 2.9%. After a significant rally on Thursday, the S&P 500 and the tech-heavy Nasdaq Composite managed to recover from earlier losses in August.

Consumer Sentiment and Data

The rally was mainly aided by two data: monthly retail sales and Walmart‘s (WMT) latest earnings report. These reports indicated that recession fears stemming from the stock market’s early August drop might be overblown. Walmart’s CFO indicated consistent consumer behavior throughout the second quarter, noting no major slump in July.

Retail sales in the United States inched up 1% sequentially in July 2024, following a downwardly revised 0.2% drop in June and way better than forecasts of a 0.3% gain. It is the biggest increase since January 2023, with sales at motor vehicle and part dealers rising the most (3.6%), followed by sales at electronics and appliance stores (1.6%) (read: Retail Sales Gains in July: ETFs & Stocks to Play).

The Consumer Price Index (CPI) showed its lowest year-over-year increase since early 2021, allowing the S&P 500 and Nasdaq to recover losses from earlier in the month (read: Momentum ETFs to Play as Wall Street Rallies?).

Federal Reserve Rate Cuts

In light of the positive economic data, investor expectations regarding Fed rate cuts have moderated. Current data from the CME Group shows a 66% chance of a 0.25% rate cut by the Fed next month, with a 33% probability for a 0.50% cut. This goes against the previous market speculation for a larger rate reduction.

Top-Performing ETFs

Against this backdrop, below we highlight a few winning inverse/leveraged ETFs of last week.

Nvidia-Heavy ETF – Direxion Daily NVDA Bull 2X Shares NVDU – Up 40.1%

Nvidia share price gained 17.2% due to a tech rebound rally. The Direxion Daily NVDA Bull 2X Shares seeks daily investment results, before fees and expenses, of 200% of the performance of the common shares of NVIDIA Corporation. The expense ratio of NVDU is 1.04%.

Gold Miners – MicroSectors Gold Miners 3X Leveraged ETN GDXU – Up 24.0%

The underlying S-Network MicroSectors Gold Miners Index seeks to provide exposure to the performance of the VanEck Vectors Gold Miners ETF and the VanEck Vectors Junior Gold Miners ETF. The fund charges 95 bps in fees.

Leveraged Technology – Direxion Daily Technology Bull 3X Shares TECL – Up 23.8%

The underlying Technology Select Sector Index includes domestic companies from the following industries: computers & peripherals; software; diversified telecommunications services; communications equipment; semiconductors & semiconductor equipment; internet software & services; IT services; electronic equipment, instruments & components; wireless telecommunication services; & office electronics. The fund charges 94 bps in fees.

South Korea – Direxion MSCI Daily South Korea Bull 3X Shares KORU – Up 16.1%

The underlying MSCI Korea 25-50 Index measures the performance of the large and mid-cap segments of the South Korea equity market, covering approximately 85% of the free float-adjusted market capitalization in South Korea. The fund’s expense ratio is 1.34% and the fund yields 2.77%.

Tesla-Heavy – GraniteShares 2x Long TSLA Daily ETF TSLR – Up 15.9%

The Tesla stock was up 8.7% last week. The GraniteShares 2x Long TSLA Daily ETF seeks daily investment results, before fees and expenses, of 2 times the daily percentage change of the common stock of Tesla Inc. The expense ratio of the ETF is 1.50%.

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