6 Leveraged ETFs To Play Trade, Oil And Shutdown Hopes
Zacks Investment Research | Feb 12, 2019 08:00PM ET
U.S.-China trade tensions unexpectedly brought the much-needed short relief for Wall Street. President Donald Trump said 5 Reasons Why Oil Saw the Best January: 5 ETF Winners ).
Also, on Jan 28, the Trump administration imposed sweeping sanctions against Venezuelan state-owned oil firm Petróleos de Venezuela, S.A. due to political issues. Both factors offered United States Oil (NYSE:USO) US Sanctions Against Venezuela? ETFs to Top & Flop ).
In the United States, investors were fearing a second government shutdown after a 35-day one happened recently. There were clashes between Democrats and Republicans on funding a $5.6 billion wall along the Mexico border. However, Second Shutdown Seems Unlikely: Pick High Beta & Momentum ETFs ).
If these were not enough, the Fed has been offering a dovish tone since the start of this year. So, hopes of a few more months of cheap money inflows should keep the stock market on a tear.
Below we have highlighted five ETF areas that could offer stellar gains in the coming days. These funds should continue to be investors’ hot-favorite provided the sentiments remain the same.
Nasdaq
ProShares UltraPro QQQ QLD offers 200% of the daily performance of the NASDAQ-100 Index. TQQQ was up 4.3% and QLD added 3% on Feb 12.
S&P 500
ProShares Ultra S&P 500 (BO:SSO) corresponds to twice (200%) the daily performance of the S&P 500, while Direxion Daily S&P 500 Bull 3X Shares (BS:SPXL) offers 300% of the S&P 500. SSO gained 2.6% while SPXL was up 3.9% on Feb 12.
Dow Jones
ProShares UltraPro Dow30 UDOW intends to correspond to triple (300%) the daily performance of the Dow Jones Industrial Average, while ProShares Ultra Dow30 (ST:DDM) looks to offer twice the daily performance of the Dow Jones Industrial Average. UDOW gained 4.3% and DDM was up 2.9% on Feb 12.
Oil & Energy
Direxion Daily Energy Bull 3X ETF ( (AX:ERX) ) tracks 300% of the performance of the Energy Select Sector Index. ProShares Ultra Bloomberg Crude Oil (UCO ) corresponds to twice the daily performance of the daily performance of the Bloomberg WTI Crude Oil Subindex. ERX was up 3.6% and UCO gained about 2.9% on Feb 12.
China
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Any trade truce or delay in further flare-ups in tensions is likely to bode well for Chinese stocks. The fund Direxion Daily China 3x Bull Shares YINN offers 300% of the performance of the FTSE China 50 Index, which consists of the 50 largest and most-liquid public Chinese companies currently trading on the Hong Kong Stock Exchange. The fund was up 0.5% on Feb 12.
Semiconductor
Per Morgan Stanley (NYSE:MS) equity strategists, “semiconductor and semiconductor equipment companies have the highest revenue exposure to China at SOXL , which gives exposure to 300% of the performance of the PHLX Semiconductor Sector Index. The fund added more than 6.3% on Feb 12.
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