Best Leveraged ETF Areas Of Last Week

Trade optimism, a third Fed rate cut and some better-than-expected corporate earnings drove the stock market last week. The S&P 500, the Nasdaq and the Dow Jones added about 1% last week (as of Nov 1, 2019). The S&P 500 and the Nasdaq reached a record high on Nov 1.

Against this backdrop, below we highlight a few ETF areas that outperformed last week.

Natural Gas

Like in most winters, natural gas prices have started receiving warmth from the chills this year. Expectations of cooler-than-usual fall weather in some parts of the United States boosted the natural gas prices last week. The cooler weather boosts electricity demand across the region, putting focus on natural gas.

As a result, leveraged natural gas ETFs like VelocityShares 3x Long Natural Gas ETN Linked to the S&P GSCI Natural Gas Index ER UGAZ and ProShares Ultra Bloomberg Natural Gas (LON:BOIL) added about 30.2% and 17.8% last week, respectively.

Pharma & Biotech

Leveraged pharma and biotech ETFs Direxion Daily Pharmaceutical & Medical Bull 3X Shares ETF (CSE:PILL) (up 13.4%), ProShares UltraPro Nasdaq Biotechnology UBIO (up 12.4%), Direxion Daily Healthcare Bull 3X Shares (AS:CURE) (up 9.3%) and Direxion Daily S&P Biotech Bull 3X Shares LABU (up 8.3%) had a great show last week. A spate of good news related to earnings, clinical data and FDA listings boosted the sector.

Gold Miners

Fed rate cuts and low rates are acting as tailwinds to the space. Fed rate cuts kept bond yields at check and the greenback at subdued levels, which in turn favored gold prices, and mining stocks and ETFs. A slowdown in global economic growth is being observed. This has boosted demand for the safe-haven metal gold. Direxion Daily Junior Gold Miners Index Bull 3X Shares JNUG gained about 9.2% last week (read: Gold ETFs to Bet on Diwali Bonanza).

India

India’s stock market indices Sensex and Nifty have been on a tear lately. The benefits of corporate-tax cut had an upper hand over the shadow banking crisis. Growing optimism over the U.S.-China phase-one trade deal has also benefited Asian shares. Direxion Daily MSCI India Bull 3x Shares (NS:INDL) advanced about 8.8% in the past week.

Russia

Despite sanctions, American investors poured billions into the Russian stock market. Wall Street investors make up about half of the foreign capital flowing into Russian stocks, according to the Moscow Exchange. Policy easing is benefiting the space.

On Oct 25, the Central Bank of Russia cut its benchmark one-week repo rate by 50 bps to 6.50%, beating market expectations of a 25-bp reduction. It marked the fourth rate cut this year. Since policy easing is expected to spur growth, a 8% weekly jump in Direxion Daily Russia Bull 3X Shares RUSL is self-explanatory (read: 5 Leveraged ETFs That Gained More Than 20% in October).

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