The U.S.-China G-20 meet unexpectedly brought the much-needed relief for Wall Street. In the meet, China’s president Xi Jinping and U.S. President Donald Trump agreed to not announce any new tariffs for 90 days.
The news came in as better than expected given that market participants were skeptical ahead of the Saturday meet. President Trump had previously warned of increasing the existing 10% tariff on $200 billion of imported Chinese goods to 25% in January. And suddenly a pause for three months set a party mood for the investing world, especially the United States and Asia (read: Hedge Portfolio With These ETFs Ahead of Trump-Xi G-20 Meet).
To add to the short-term trade truce, good news came flowing in from the oil patch also. Oil, which suffered a lot in November, jumped after Russia and Saudi Arabia announced plans to prolong their output cut deal into 2019, although both parties are yet to confirm any fresh output cuts. Still, oil prices are likely to hold firm in the coming sessions on abating concerns of a supply glut.
And last but not the least, the Fed chair Jerome Powell said on Nov 28 that interest rates are “just below” neutral, which means that they are neither speeding up nor slowing down the economy’s growth. This was against his October comments that interest rates were a “long way” from neutral. The latest comments from Powell were seen as dovish and stocks soared (read: Will Powell, Valuation & Holiday Season Power Momentum ETFs?).
Investors should note that, the S&P 500’s multiple has been squeezed 15% from the year-ago level to 15.8 times the forecast earnings, hovering around the cheapest level since early 2016. All these make markets ready for a steady and continued uptrend in the near term.
Futures Steady
The futures market remained pretty solid with Brent crude for February increasing about 2.3% a barrel, while West Texas Intermediate for January delivery increasing 3.2%. December Futures for the Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500 have already added 1.9%, 2.1% and 1.7%, respectively,
Below we have highlighted five ETF areas that could offer stellar gains in the coming days. These funds should continue to be investors’ hot-favorite provided the sentiments remain the same.
China
Direxion Daily China 3x Bull Shares (YINN)
The trade-truce is likely to bode well for Chinese stocks.The fund offers 300% of the performance of the FTSE China 50 Index, which consists of the 50 largest and most-liquid public Chinese companies currently trading on the Hong Kong Stock Exchange.
Nasdaq
ProShares UltraPro QQQ (TQQQ) is a triple-leveraged Nasdaq-100 ETF, while ProShares Ultra QQQ (QLD) offers 200% of the daily performance of the NASDAQ-100 Index.
S&P 500
ProShares Ultra S&P 500 ( (BO:SSO) ) corresponds to twice (200%) the daily performance of the S&P 500 while Direxion Daily S&P 500 Bull 3X Shares ( (BS:SPXL) ) offers 300% of the S&P 500 (read: S&P 500 to Gain After Election: Leveraged ETFs in Focus).
Dow Jones
ProShares UltraPro Dow30 (UDOW) intends to correspond to triple (300%) the daily performance of the Dow Jones Industrial Average, while ProShares Ultra Dow30 ( (ST:DDM) ) looks to offer twice the daily performance of the Dow Jones Industrial Average.
Technology
Direxion Daily Technology Bull 3X Shares (TECL) tracks 300% of the performance of the Technology Select Sector Index.ProShares Ultra Technology ( (BX:ROM) ) corresponds to twice the daily performance of the Dow Jones U.S. Technology Index.
Semiconductor
Per Morgan Stanley (NYSE:MS) equity strategists, “semiconductor and semiconductor equipment companies have the highest revenue exposure to China at 52%” and are thus exposed to maximum risks on rising trade tensions. A cessation in trade dispute is expected to favor Direxion Daily Semiconductor Bull 3x Shares SOXL, which gives exposure to 300% of the performance of the PHLX Semiconductor Sector Index.
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PRO-ULTR S&P500 (SSO): ETF Research Reports
PRO-ULT DOW30 (UDOW): ETF Research Reports
PRO-ULTR DOW30 (DDM): ETF Research Reports
PRO-ULTR QQQ (QLD): ETF Research Reports
DIR-D SM BL 3X (SOXL): ETF Research Reports
DIRX-LC BULL 3X (SPXL): ETF Research Reports
PRO-ULT QQQ (TQQQ): ETF Research Reports
DIR-D F CHIN BL (YINN): ETF Research Reports
DIR-TEC BULL3X (TECL): ETF Research Reports
PRO-ULT TECH (ROM): ETF Research Reports
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