Last week was moderate for the stock market despite rising coronavirus cases. Notably, states like Arizona, Florida, Texas, California and South Carolina have seen a considerable rise in new cases. Still, upbeat economic data points and further Fed support kept Wall Street going. SPDR S&P 500 ETF Trust (ASX:SPY) SPY, SPDR Dow Jones Industrial Average (NYSE:DIA) ETF Trust DIA and Invesco (NYSE:IVZ) QQQ Trust QQQ added about 1.9%, 1.04% and 22.4%, respectively (as of Jun 19, 2020).
The Fed announced at the start of the week that it would begin purchasing $250 billion in individual corporate bonds as part of its emergency lending program to inject liquidity into the ailing economy. The move is part of the Fed’s secondary market corporate credit facility. Notably, a flood of liquidity in the form of fiscal and economic stimulus sparked a remarkable rally in the stock market since the lows reached in late-March.
Retail sales in the United States surged 17.7% sequentially in May as the coronavirus-led lockdown eased, breezing past forecasts of an 8% jump and after a record 14.7% slump in April. This marked the biggest rise on record in retail sales. Most of the sectors that were the biggest laggards in April staged a rebound in May.
Housing starts jumped 4.3% to a seasonally adjusted annual rate of 974,000 units in May per a National Association of Home Builders (NAHB) press release. The metric compared quite favorably with the decline of 26.4% in April and 19% in March. On a year-over-year basis, housing starts were down 23.2% in May (read: Are Housing ETFs Recovering From Coronavirus Injuries? Let's See).
Tech-heavy Nasdaq remained strong on fears of a second wave of coronavirus that charged up stay-at-home tech stocks. Moreover, big tech companies are now eyeing the virus-testing & tracing business (read: Big Techs Making the Most of Medical Emergency: ETFs to Win).
Verily Life Sciences, a sister company of Google (NASDAQ:GOOGL), is now launching a health screening and analytics service for businesses trying to safely reopen during the pandemic. Microsoft MSFT recently stated that it has expanded its network and data center capacity to meet growing demand for cloud services amid the ongoing coronavirus pandemic.
Oil prices too remained decent on output cut initiatives in the form of the OPEC+ agreement and the meeting of G20 energy ministers. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output by a record 9.7 million barrels per day (bpd) or 10% of global supply since May 1.
Against this backdrop, below we highlight a few top-performing leveraged ETFs of last week.
Credit Suisse (SIX:CSGN) SP MLP Index ETN (MLPO) – Up 46.1%
The underlying S&P MLP Index includes both master limited partnerships and publicly traded limited liability companies which have a similar legal structure to MLPs and share the same tax benefits as MLPs. It charges 95 bps in fees.
Breakwave Dry Bulk Shipping ETF (BDRY) – Up 14.4%
The underlying Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure rates for shipping dry bulk freight. The expense ratio of the fund is 1.85%.
United States Gasoline ETF (UGA) – Up 11.6%
The underlying Gasonline Price Index looks to reflect the changes of the price of gasoline, as measured by the price of the contract on unleaded gasoline for delivery to the New York harbor, traded on the NYMEX that is the near month to expire, except when the near contract is within two weeks of expiration, in which case it will be measured by the contract that is the next month contract to expire. The fund charges 75 bps in fees.
Invesco DWA Healthcare Momentum ETF (PTH) – Up 11.0%
The underlying DWA Healthcare Technical Leaders Index identifies companies that are showing relative strength and are composed of at least 30 common stocks from a universe of approximately 3,000 common stocks traded on U.S. exchanges. It charges 60 bps in fees.
Renaissance IPO ETF (IPO) – Up 10.5%
The underlying Renaissance IPO Index is a portfolio of newly U.S.-listed initial public offerings of companies whose unseasoned equities are under-represented in core U.S. equity indices. IPOs that meet liquidity & operational screens are included on the index at the end of the fifth day of trading, or upon quarterly reviews, weighted by tradable float, capped at 10% and removed after two years. It charges 60 bps in fees.
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Microsoft Corporation (NASDAQ:MSFT): Free Stock Analysis Report
SPDR SP 500 ETF (SPY): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
Invesco DWA Healthcare Momentum ETF (PTH): ETF Research Reports
United States Gasoline ETF (UGA): ETF Research Reports
Renaissance IPO ETF (IPO): ETF Research Reports
Credit Suisse SP MLP Index ETN (MLPO): ETF Research Reports
Breakwave Dry Bulk Shipping ETF (BDRY): ETF Research Reports
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