Wall Street was moderately upbeat last week with the S&P 500 (0.58%), the Dow Jones (down 0.24%), the Nasdaq Composite (up 1.6%) and the Russell 2000 (up 0.7%) gaining moderately. The benchmark treasury yield jumped to 1.33% on September 3 from 1.29% on Aug 30.
Coming to the datapoints, the jobs report for August was a massive disappointment, with the economy adding only 235,000 positions, the Labor Department reported Friday. Economists surveyed by the Dow Jones projected 720,000 job gains. The unemployment rate declined to 5.2% from 5.4%, in line with estimates.
The Conference Board's measure of consumer confidence index came in at 113.8 in August(the lowest level since February), comparing unfavorably with July’s reading of 125.1. August’s reading also missed the consensus estimate of the metric declining to 124, per a Reuters’ poll. The metric continues to be below the pre-pandemic level of 132.6 in February 2020 (read: ETFs to Suffer as US Consumer Confidence Falls in August).
On the global front, after underperforming for several months, Japan stocks have gained momentum lately on hopes of a stronger government ahead of a ruling party leadership race and a general election in November. The resignation of Prime Minister Yoshihide Suga has opened the door for the new government, which will likely unveil an economic package to support pandemic-hit businesses and families (read: Japan Topix Hits 30-Year High: ETFs to Tap).
As such, the move has spurred bets for strong economic recovery by the end of the year. Notably, the Japan Topix Index climbed to the highest level since April 1991 and has been outperforming its Asian peers in recent weeks. The gains were also driven by record earnings and rising vaccination rates.
Not only Japan, European stocks have been enjoying their longest winning streak since 2013. Notably, the Stoxx 600 European equity index wrapped up its seventh straight month of gain and is now less than 1% away from a record high (read: Ride Europe Rally With These Best-Performing ETFs).
Against this backdrop, below we highlight a few inverse/leveraged ETFs that gained massively last week.
ETFs in Focus
CSI China Internet Index Bull 2X Direxion CWEB – Up 18.4%
Chinese technology stocks surged lately after many weeks of sell-off brought about by Beijing’s regulatory crackdown. Superb results reported by JD.com (NASDAQ:JD) and Pinduoduo (NASDAQ:PDD), as well as share buyback announcement by Tencent (TCEHY (OTC:TCEHY)) are helping the rebound. Despite rising uncertainty, some investors have continued to pour money into these beaten down stocks and ETFs.
Moreover, shares of Didi posted almost double-digit gains last week,following a Bloomberg News report that Beijing is planning to take the disturbed ride-hailing giant under state control by acquiring a stake through government-run firms.
Ultra Bloomberg Natural Gas ETF BOIL – Up 14.2%
The benchmark U.S. natural gas price has nearly doubled over the past year. Production in some shale basins is not recovering from the pandemic-induced slump last year as fast. In the Permian, fewer oil-directed rigs are pumping less associated gas, per oilprice.com. As a result, natural gas prices are rising (read: Natural Gas Prices Are Soaring Despite U.S. Production Records).
Ultra MSCI Japan ETF EZJ – Up 11.6%
After underperforming for several months, Japan stocks have gained momentum lately on hopes of a stronger government ahead of a general election in November. The resignation of Prime Minister Yoshihide Suga has opened the door for the new government, which will likely unveil an economic package to support the pandemic-hit businesses and families. As such, the move has spurred bets for strong economic recovery by the end of the year. Notably, the Japan Topix Index climbed to the highest level since April 1991 and has been outperforming its Asian peers in recent weeks.
Real Estate Bull 3X Direxion DRN – Up 11.1%
The U.S. real estate sector is in the pink this year. Rising inflation and an uptick in home prices which in turn boosted the demand for renting, a still-shaky job market and the resultant demand for rent from a low-income group, the booming cloud and 5G business, and lucrative yields from the sector boosted the space last week (read: Real Estate ETFs at All-Time Highs: Here's Why).
Microsectors -3X U.S. Big Banks ETN BNKD – Up 10.3%
The underlying Solactive MicroSectors U.S. Big Banks Index is an equal-dollar weighted index and seeks to provide exposure to the 10 largest U.S. banks and financial services companies. Bank ETF (KBWB) lost 1.33% last week. This explains why inverse leveraged big bank ETF BNKD added solid gains last week.
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ProShares Ultra Bloomberg Natural Gas (BOIL): ETF Research Reports
Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB): ETF Research Reports
Direxion Daily MSCI Real Estate Bull 3x Shares (DRN): ETF Research Reports
ProShares Ultra MSCI Japan (EZJ): ETF Research Reports
MicroSectors U.S. Big Banks Index 3X Inverse Leveraged ETNs (BNKD): ETF Research Reports
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