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Last week was extremely upbeat for the U.S. stocks. The S&P 500 logged the best week since February, per a MarketWatch article. Slightly tamer-than-expected inflation data probably boosted investors’ sentiments. The personal consumption expenditures (PCE) price index, barring the volatile food and energy components, increased 0.5%, below economists’ expectations of a 0.6% increase.
Then there was Biden's infrastructure deal, which boosted investors’ optimism even more. According to the White House, the infrastructure deal will include $579 billion in new spending. Going by a CNBC article, the proposal will allocate about $312 billion to transportation, with $109 billion going for development in roads, bridges and other major projects, $66 billion in passenger and freight rail and $49 billion in public transit.
Going on, about $15 billion will be invested in electric vehicle infrastructure and electric buses and transit, much lesser than what Biden initially proposed. Furthermore, $266 billion will be allocated toward non-transportation infrastructure, including $73 billion for power, $65 billion for broadband and $55 billion for water. (read: ETFs to Gain on Biden's Infrastructure Deal).
The S&P 500 (up 2.74%), the Dow Jones (up 3.44%), the Nasdaq composite (up 2.35%) and the Russell 2000 (up 4.32%) gained materially last week. Against this backdrop, below we highlight a few leveraged ETF investing areas that gained the maximum last week.
Oil prices have been steady lately. Continued revival in factory activities and pent-up summer travel also boosted the demand for energy prices. BofA Global Research boosted its Brent crude price forecasts for this year and next, as tighter oil supply and demand recovery in 2022 could push oil briefly to $100 per barrel.
Microsectors U.S. Big Oil Index 3X ETN NRGU – Up 21.4%
S&P Oil & Gas Expl Bull 3X Direxion GUSH – Up 20.4%
Consumer spending, which makes up more than two-thirds of U.S. economic activity, held steady following an upwardly revised 0.9% uptick in April. Economists polled by Reuters had forecast consumer spending rising 0.4%. This piece of news probably have boosted the retail space.
Retail Bull 3X Direxion RETL – Up 20.3%
Long-term U.S. Treasury yields increased to 1.54% on Jun 25 from 1.50% on Jun 21. The steepening of the yield curve boosted the financial stocks. The modestly rising rate environment is another plus for the banking stocks. Earnings have been upbeat in the sector.
Microsectors 3X U.S. Big Banks ETN BNKU – Up 20.2%
Regional Banks Bull 3X Direxion DPST – Up 20.0%
Financial Bull 3X Direxion FAS – Up 15.8%
A decently growing U.S. economy, strong consumer savings and promising corporate earnings acted as catalysts for the high-beta stocks.
S&P 500 High Beta Bull 3X Direxion HIBL – Up 16.9%
The NYSE FANG+ index includes 10 highly liquid stocks that represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies. The fund charges 95 bps in fees.
Microsectors Fang+ 3X ETN FNGU) – Up 15.2%
The Fed has signaled two rate hikes by the end of 2023 amid higher inflation. This should boost the greenback and benefit the domestically-focused small-cap stocks. The Fed Chairman Jerome Powell has however remained bullish on the economic recovery achieved so far from the pandemic-led slump, according to a CNBC article. He also maintained that high inflation levels were temporary and will return to 2% over the long term, per the same article (read: Small-Cap ETFs to Play the Recovery in US Economy).
Ultrapro Russell2000 ETF URTY – Up 13.8%
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Direxion Daily Financial Bull 3X Shares (FAS): ETF Research Reports
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH): ETF Research Reports
Direxion Daily Regional Banks Bull 3X Shares (DPST): ETF Research Reports
Direxion Daily Retail Bull 3x Shares (RETL): ETF Research Reports
ProShares UltraPro Russell2000 (URTY): ETF Research Reports
MicroSectors U.S. Big Banks Index 3X Leveraged ETN (BNKU): ETF Research Reports
MicroSectors U.S. Big Oil Index 3X Leveraged ETN (NRGU): ETF Research Reports
Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL): ETF Research Reports
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