Last week was eventful for Wall Street with WTI oil’s May contract diving to the negative territory for the first time in history to start the week. Weak demand emanated from coronavirus-led lockdowns, ample supplies despite the biggest OPEC output cut deal and most importantly storage crisis led to the selloffs in the oil patch. This weighed on global markets (read: Sector ETFs to Win or Lose on Oil Collapse).
Though oil gained finally at the end of the week on renewed U.S.-Iran tensions, Wall Street saw its weekly winning streak snap. For the week, the Dow and the S&P 500 declined 1.9% and 1.3%, respectively, and the Nasdaq dipped 0.2%. The declines marked the first losing week for the key U.S. equity gauges of the past three weeks, as quoted on MarketWatch.
Only small-cap index Russell 2000 recorded a 0.3% weekly gainon hopes of reopening of the U.S. economy and a massive government stimulus. President Trump announced a $484 billion-coronavirus relief package that includes a second round of funding for small businesses under the Paycheck Protection Plan, or PPP (read: Small-Caps Bounce Back: Buy 8 Trending ETFs).
Against this backdrop, blow we highlight a few leveraged ETFs that gained the most last week.
Direxion Daily Junior Gold Miners Index Bull 2X Shares JNUG — Up 29.86%
Low oil prices are a plus for gold miners. Mining companies’ 50% production costs are closely linked to energy prices. Cheap oil should work wonders for gold miners’ operating margins. In any case, gold is in high demand due to its safe-haven status amid coronavirus-led economic uncertainty. Global policy stimulus would give further support to it (read: 5 Reasons Why Gold Mining ETFs & Stocks Have More Room to Run).
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares GUSH— Up 23.1%
Threats by President Donald Trump to destroy Iranian gunboats if they harass U.S. navy ships have triggered tensions in the oil-rich Middle East. Meanwhile, news reports indicate that some OPEC producers including Saudi Arabia and Kuwait are considering to cut production ahead of the May 1 schedule to contain the oil price slump. OPEC and its allies have agreed to cut oil production by 9.7 million barrels a day starting May 1 through Jun 30 to balance the oil market (read: OPEC Output Deal Cut: Will It Help Oil & Energy ETFs?).
Direxion Daily S&P Biotech Bull 3X Shares LABU — Up 17.5%
With coronavirus taking the world in its grip, research work on treatments and vaccines are going on at an extraordinary pace, which in turn is benefiting the entire biotech and pharma industry. Trump’s latest version of virus-relief plan has allocated $75 billion for hospitals and $25 billion for coronavirus testing.
Though the news of Gilead Sciences (NASDAQ:GILD)’ GILD Remdesivir’s failure to show enough promises in coronavirus patients spoilt the mood in the sector a bit, some upbeat pharma and healthcare earnings and other companies’ efforts toward drug and vaccine developments helped the space (read: Healthcare & Biotech ETFs Digest GILD's Failure News: 5 Winners).
Direxion Daily Dow Jones Internet Bull 3X Shares WEBL — Up 7.5%
The Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related. The coronavirus-induced lockdowns have forced people to turn to the online mode of operation for daily essentials to working-and-learning-from-home (read: Is Coronavirus a Boon for Online Retail ETFs?).
Direxion Daily 20+ Year Treasury Bull 3X Shares TMF— Up 7.5%
U.S. long-term treasuries have remained steady as the benchmark treasury yield dropped to 0.60% from 0.63% at the start of the week. The yield plunged to the low of 0.58% on the oil price rout on Apr 21. In short, increased volatility in the market kept safe-haven U.S. treasuries strong last week.
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Direxion Daily 20+ Year Treasury Bull 3X Shares (TMF): ETF Research Reports
Direxion Daily S&P Biotech Bull 3X Shares (LABU): ETF Research Reports
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH): ETF Research Reports
Direxion Daily Junior Gold Miners Index Bull 2X Shares (JNUG): ETF Research Reports
Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL): ETF Research Reports
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