For Immediate Release
Chicago, IL – April 26, 2022 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Microsectors Gold Miners -3X ETN GDXD, S&P Biotech Bear 3X Direxion LABD, Microsectors Fang+ -3X ETN FNGD, Dow Jones Internet Bear 3X Direxion WEBS and Etfmg Prime Junior Silver Miners -2X ETF SINV.
Here are highlights from Monday’s Analyst Blog:
Best Inverse/Leveraged ETFs of the Past Week
Wall Street was downbeat last week due to mounting inflationary pressures, rising rate worries and geopolitical tensions. The S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000, declined 2.8%, 1.9%, 3.8% and 3.2%, respectively.
As far as rates are concerned, the benchmark treasury yield started the week with 2.85%, hit a high of 2.93% and then closed the week at 2.90%. Fed Chairman Jerome Powell said the central bank is committed to raising rates “expeditiously” to tame inflation.
Investors took the statement as an interest rate hike of 50 basis points in May as inflation is at a 40-year high. “It’s absolutely essential to restore price stability,” Powell added, per a CNBC article (read: A 50-Bp Rate Hike in May? Sector ETFs to Win).
Also, the recently released FOMC minutes of the March meeting highlighted the central bank’s plans to control the inflation levels by larger interest rate hikes. It also outlined the method and magnitude of reducing the balance sheet holding around $9 trillion in assets.
Notably, the Federal Reserve officials have decided to shrink their balance sheet by approximately $95 billion a month. More precisely, Fed plans to reduce $60 billion in Treasuries and $35 billion in mortgage-backed securities, phasing in over three months, starting May (per a CNBC article).
Against this backdrop, below we highlight a few inverse/leveraged ETF areas that won last week. Most winners were the outcome of the rising rate trend.
ETFs in Focus
Microsectors Gold Miners -3X ETN – Up 32.86%
As rising rates are negative for gold bullion investing (as gold is a non-interest-bearing asset) and mining companies often act as a leveraged trade of the underlying metal, inverse gold-mining ETF GDXD gained massively.
S&P Biotech Bear 3X Direxion – Up 28.7%
The rising rate trend is negative for growth sectors like tech and biotech. No wonder, this inverse-leveraged biotech fund was a winner last week.
Microsectors Fang+ -3X ETN – Up 28.3%
Inverse leveraged FANG ETF was a winner last week due to two factors. One is the crash in Netflix (NFLX) shares due to surprise subscriber loss last quarter. And the second is the Fed’s faster rate hike stocks. Tech stocks normally fare better in a low-rate environment.
Dow Jones Internet Bear 3X Direxion – Up 26.9%
Inverse Leveraged internet stocks also gained last week due to rising rate trends. Netflix’s share slump also caused its share of damage to the Internet industry.
Etfmg Prime Junior Silver Miners -2X ETF – Up 26.4%
The crash in silver mining stocks was also due to the rising rate trends. Rising rates will result in a higher greenback, which is inversely related to the metal prices.
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Direxion Daily S&P Biotech Bear 3X Shares (LABD): ETF Research Reports
MicroSectors FANG Index 3X Inverse Leveraged ETNs (FNGD): ETF Research Reports
Direxion Daily Dow Jones Internet Bear 3X Shares (WEBS): ETF Research Reports
MicroSectors Gold Miners 3X Inverse Leveraged ETNs (GDXD): ETF Research Reports
ETFMG Prime 2x Daily Inverse Junior Silver Miners ETF (SINV): ETF Research Reports
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