Wall Street Loses Maximum Since October: Inverse ETFs To Play
Zacks Investment Research | Dec 02, 2019 08:00PM ET
Wall Street was hit hard on Dec 2 by fresh trade tensions and downbeat U.S. manufacturing data. Each of the key U.S. indexes — The S&P 500, the Dow Jones and the Nasdaq — suffered their QQQ lost about 0.8%, 0.9% and 1.02%, respectively, on the day.
“President Donald Trump’s announcement that he would reimpose tariffs on Brazilian and Argentinian steel and aluminum” and possibilities of China intensifying retaliation over a supportive U.S. bill toward pro-democracy Hong Kong protestors flared up geopolitical tensions.
On top of it, the ISM contraction in activity .
Also, U.S. construction spending declined 0.8% in October against expectation of a 0.4% increase . Spending on private, residential and public construction projects declined for the month, leading to more than a 1.8% slump inReal Estate Select Sector SPDR Fund (XLRE) on Dec 2.
How to Profit
Given the upheaval, investors might want to go short on Wall Street as well as global equities, at least for the time being. Below we highlight a few of inverse ETFs.
Dow Jones
Investors intending to play against the tumbling Dow Jones, may tap ProShares Short Dow 30 SDOW (up 2.9%).
China
China-related inverse play could be Direxion Daily CSI 300 China A Share Bear 1X Shares CHAD ( up 0.5% on Dec 2).
S&P 500
Investors can go against the S&P 500 with ProShares Short S&P500 ETF SPDN (up 0.8%).
Technology
Technology stocks were hit hard on Monday. Thus, inverse ETF ProShares UltraShort Technology ( (TSXV:REW) ) jumped about 2.8% on Dec 2.
Nasdaq
ProShares Short QQQ (ASX:PSQ) (up 1.1%), ProShares UltraShort QQQ SQQQ (up 3.3%) are good to play against the Nasdaq.
Small-Cap
One can short small-cap U.S. equities with ProShares Short Russell2000 (RWM) (up 1%).
EAFE
ProShares Short MSCI EAFE EFZ (up 0.6%) could be a good way to short stocks from the EAFE region and avoid the spillover effect of the global trade fear.
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