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 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 (NASDAQ:FB) 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 (NYSE:TSM) 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 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 (up 7% in the last one month) and ProShares Short MSCI Emerging Markets EUM (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 (up 3.9% in the last one month), ProShares UltraPro Short 20+ Year Treasury (AX:TTT) (up 4% in the last one month) and ProShares UltraShort 20+ Year Treasury (NYSE:TBT) (HN:TBT) (up 2.7% in the last one month) also hit their one-month high on Apr 24.

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