Wall Street was upbeat last week, with the S&P 500 adding 1.5%, the Dow Jones gaining 1.3% and the Nasdaq advancing 1.4%. Stocks were buoyed by Federal Reserve Chair Jerome Powell's speech at the Jackson Hole economic symposium signaled a September rate cut.
Also recessionary fears in the United States ebbed lately. Last Monday, Goldman Sachs analyst Jan Hatzius cut his earlier forecast for a U.S. recession over the next 12 months from 25% to 20%, citing improved economic data and a strong corporate earnings season, according to Yahoo Finance.
As of Friday, the benchmark U.S. treasury yield was 3.81% versus 3.86% recorded as of Aug. 19. Such a drop in bond yields probably has boosted the broader stock market. Against this backdrop, we highlight a few winning inverse/leveraged ETFs of past week.
Best Performing Leveraged ETFs
Direxion Daily Homebuilders & Supplies Bull 3X Shares NAIL – Up 24.3%.
Expectations that the Fed will start cutting interest rates at its next meeting in September have buoyed the housing market in recent weeks. As a result, this leveraged homebuilding ETF gained lately.
Direxion Daily Regional Banks Bull 3X Shares DPST – Up 15.1%.
As short-term bond yields dropped and long-term yields gained, the steepening of the yield curve benefitted regional bank stocks and ETFs. This pattern of the yield curve is helpful for bank stocks as it boosts the net interest rate margin. As a result, this leveraged regional bank ETF logged solid gains last week.
Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares EVAV – Up 14.5%.
Some electric vehicle stocks logged gains last week. Tesla stock advanced 1.4%. Li Auto stock advanced 3.8%. Rivian Automotive shares jumped 4.4%. Nio shares added 1.2%. As a result, this leveraged EV ETF EVAV rose last week.
ProShares Ultra Bitcoin ETF BITU – Up 12.7%.
Bitcoin price jumped 8% last week. Investors should note that Goldman Sachs and Morgan Stanley invested huge sums into spot bitcoin ETFs in the second quarter of 2024, according to regulatory filings, as quoted on Reuters. Together, the banks acquired more than $600 million in these products, which began trading in January 2024. This piece of news has probably boosted investors’ confidence about this particular cryptocurrency.
Defiance Daily Target 2x Long Uranium ETF URAX – Up 11.8%.
Kazatomprom, the world’s largest uranium producer, has cut its production target for 2025 due to project delays and sulphuric acid shortages, triggering supply concerns about the radioactive fuel vital for nuclear power, per Financial Times. The move will likely boost uranium prices in the coming days and benefits ETFs like URAX.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
