Correction Starts!? Bear ETFs SQQQ, ZSL, QID, UVXY & YANG are Winners
Hello Tigers[Heart]
Why did U.S. stocks fall on Wednesday? What are the market expectations going forward?
Assuming the correction continues, which sectors can we turn attention to?
Below is some info may help.
After Wednesday's trading, we saw that bear ETFs like lead the gains in the ETF sector.
The top 10 ETF by % change are: $ProShares UltraPro Short QQQ(SQQQ)$ , $ProShares UltraShort Silver(ZSL)$, $ProShares UltraShort QQQ(QID)$ , $ProShares Ultra VIX Short-Term Futures ETF(UVXY)$, $Direxion Daily FTSE China Bear 3X Shares(YANG)$, $ProShares UltraPro Short S&P 500(SPXU)$ , $Direxion Daily Gold Miners Index Bear 2X Shares(DUST)$ , $ProShares VIX Short-Term Futures ETF(VIXY)$, $iPath Series B S&P 500 VIX Short-Term Futures ETN(VXX)$ and $ProShares Short QQQ(PSQ)$.
1. Why did the US stock market fall on Wednesday?
The US stock market fell on Wednesday due to two main factors:
Poor Earnings Report: ASML Holding NV's financial report was below expectations, causing its stock to plummet by about 11%. This dragged down chip stocks and significantly impacted large tech stocks like Nvidia and Broadcom, which both fell over 6%.
Options Expiration: The large-scale expiration of options increased market volatility. Market makers adjusted their positions, leading to increased trading activity and contributing to the market decline.
2. What to expect next?
Goldman Sachs' Scott Rubner warned of a U.S. stock market adjustment, advising against buying dips. Historically, July 17 marks a return turning point, with August often seeing the worst outflows from passive funds.
Interactive Brokers' Steve Sosnick noted chip stocks are under pressure from both political fronts, suggesting a broader market impact if other large-cap stocks follow suit.
Barclays' Ajay Rajadhyaksha highlighted increased geopolitical risk concerns, with a shift in U.S. stock style from tech to small-cap stocks, reflecting heightened market volatility.
3. Which areas can investors turn their attention to assuming a pullback continues
On a 5-day basis, the small caps, real estate, Financial and Home construction ETFs are leading the ETF sector performances.
Names including $Direxion Daily Small Cap Bull 3x Shares(TNA)$ , $ProShares Ultra Russell2000(UWM)$, $Direxion Daily Real Estate Bull 3X Shares(DRN)$ , $Direxion Daily Financial Bull 3x Shares(FAS)$ , $ProShares UltraPro Short QQQ(SQQQ)$, $iShares U.S. Home Construction ETF(ITB)$ , $SPDR S&P Bank ETF(KBE)$ , $ProShares Ultra Real Estate(URE)$ , $SPDR S&P Homebuilders ETF(XHB)$ , $ProShares UltraPro Dow30(UDOW)$.
Most of the above ETFs track a basket of stocks in related industries, and some are even ETFs with leverage multiples.
Compared with picking a single stock, there are multiple benefits: such as risk diversification.
Because ETFs usually contain a basket of stocks or other assets, this helps to diversify the risk of a single stock. Investors can reduce losses caused by the poor performance of a certain stock by holding ETFs.
At the same time, we also encourage investors to choose ETFs with high liquidity and better flexibility.
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- bostonxsgp·07-18ok1Report