Top 5 Leveraged ETF Areas of Last Week

Wall Street was in a cheerful mood last week as the S&P 500, the Dow Jones and the Nasdaq added 7.3%, 6.9% and 9%, respectively. After April, stocks registered their biggest weekly gains last week. The week saw the U.S. presidential election and the likelihood of a Biden presidency with a divided Congress. The Senate will likely be ruled by Republicans and the House by Democrats.

As a result, Wall Street booked remarkable gains a day after the election. The tech-centric Nasdaq gained 5.8%, outpacing the S&P (up 2.20%, which marks its best performance since June) and Dow's (up 1.3%) gains. Per a MarketWatch article, the S&P 500 and the Nasdaq recorded the best post-election day rally in history.

The absence of a “blue wave” and democratic control left market experts believing that “the Senate stays more balanced, and that balance keeps a gridlock — which prevents big changes to health care and the tax code," said Darrell Cronk, president of Wells Fargo (NYSE:WFC) Investment Institute, as quoted on nbcnews.com.

The hope of the passage of a fiscal stimulus deal (may be small in size) was probably another reason for the rally. Meanwhile, the latest U.S. manufacturing and jobs data too came in decent. Growth investing will also likely stay strong maintaining the ongoing trend.

Against this backdrop, below we highlight a few leveraged ETFs that emerged the toppers last week.

Semiconductors

The space has been a winner of U.S. election and solid M&A activity. Direxion Daily Semiconductor Bull 3x Shares SOXL, which looks to track the daily investment results 300% of the performance of the PHLX Semiconductor Sector Index, added 41.55% last week.

Cannabis

Last week, Mississippi voted to legalize medical cannabis, per the Associated Press, as quoted on Businessinsider. Mississippi is one of the first conservative states to have okayed the medical use of cannabis. This along with Biden’s (who is in favor of legalizing cannabis) victory in all likelihood boosted the space last week. In fact, Arizona, New Jersey, South Dakota and Montana voters all took steps to put an end to marijuana prohibition, which will facilitate its legal recreational use in their jurisdictions. Indxx MicroSectors Cannabis 2X Leveraged ETN MJO (up 41.22%) was the winner here.

Technology

Tech companies did extremely well on the bourses in the past two years under the Trump administration and a divided Congress. So, if there is a divided Congress again, tech companies should continue their wining momentum.

In fact, if Biden wins, tech companies should not fear. Biden’s running mate Senetor Kamala Harris is believed to have had cordial relationships with the technological sector during her previous term as the district attorney of San Francisco and attorney general in California. Daily Dow Jones Internet Bull 3X Shares WEBL and Direxion Daily Technology Bull 3X Shares TECL added 32.13% and 30.63%, respectively, last week.

Brazil

Latin American stocks had the best week in five months. It gained from an upbeat mood in emerging markets as the dollar is expected to remain calm on massive monetary policy easing in the United States. A lower and longer-than-expected level of subdued U.S. interest rates made Brazil stocks a winner as investors sought high-yield options. ProShares Ultra MSCI Brazil UBR gained 29.83% last week.

Europe

The U.S. election and the resultant gains in markets, another round of stimulus for Britain’s coronavirus-crippled economy and earnings took European stocks to a two-week high. Direxion Daily FTSE Europe Bull 3x Shares EURL added 29.1% last week.

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