Best Leveraged ETF Areas of Last Week

Wall Street delivered a mixed performance last week with the S&P 500 losing 1%, the Dow Jones adding about 0.3% and the Nasdaq losing 1.6%. The DeppSeek is mainly held responsible for the slump in the Nasdaq and the S&P 500. Let’s delve a little deeper.

DeepSeek Rout

DeepSeek, a Chinese startup developing AI models, grabbed headlines with the release of its new R1 model in late January. According to Yahoo Finance, the company revealed that training the R1 model cost just $5.6 million, significantly less compared to the $100 million required to train OpenAI's GPT-4 model.

This raises important questions about AI investment and the potential rise of more cost-efficient artificial intelligence agents, which could disrupt the current market dynamics (read: Will 2025 See Slowing AI Investments in Big Tech? ETFs in Focus).

Trump Tariffs

President Donald Trump proceeded with his tariff plans on Saturday, resolving uncertainty about the extent of his trade penalties against America's three largest trading partners—Canada, Mexico, and China. As he had pledged since his election victory, the tariffs will impose a 25% duty on Canada and Mexico and a 10% duty on China, citing concerns over fentanyl and illegal migration.

Fed Keeps Rates Steady

In the January meeting, the Federal Reserve has opted to hold interest rates steady at 4.25% to 4.5%, signaling a cautious stance on further reductions. This decision reflects lingering inflation concerns and uncertainty surrounding President Donald Trump’s economic policies, particularly on trade and immigration.

With no immediate plans for additional rate cuts, the Fed appears to be adopting a wait-and-see approach, closely monitoring inflation trends and awaiting further specification on how Trump’s policies will shape the economy.

Moderate U.S. GDP Data

The US Bureau of Economic Analysis (BEA) revealed that the United States' Gross Domestic Product (GDP) grew at an annual rate of 2.3% in the fourth quarter of 2024. This figure followed the 3.1% expansion recorded in the third quarter and missed the market expectation of 2.6%.

Meanwhile, the Gross Domestic Product Price Index rose by 2.2% in the fourth quarter, falling short of analysts' forecast of 2.5%. Additionally, the core Personal Consumption Expenditures (PCE) Price Index increased by 2.5% on a quarterly basis, aligning with market expectations.

Winning ETFs in Focus

Against this backdrop, below we highlight a few winning leveraged ETFs of last week.

Leveraged Gold Miners

MicroSectors Gold Miners 3X Leveraged ETN GDXD – Up 46.9%

Direxion Daily Gold Miners Index Bull 2x Shares NUGT – Up 31.6%

Gold ETF GLD has advanced 1.9% over the past week. Gold mining stocks that act as leveraged plays of the underlying metal, soared resultantly.

Leveraged Alibaba

GraniteShares 2x Long BABA Daily ETF BABX – Up 35%

Alibaba stock soared 9% last week, boosting its leveraged ETF BABX materially. Note that Alibaba last week released a new version of its Qwen 2.5 artificial intelligence model that it claimed surpassed the highly-acclaimed DeepSeek-V3.

Leveraged Meta

GraniteShares 2x Long META Daily ETF FBL – Up 33.9%

Meta shares surged about 10% last week, post earnings. Primarily derived from advertising revenue, Meta’s Q4 sales of $48.38 billion topped estimates of $46.96 billion while growing 20% from $40.11 billion a year ago.

Leveraged Coinbase

GraniteShares 2x Long COIN Daily ETF CONL – Up 23.7%

COIN shares added about 3%, although shares slumped on the finally day of the week. Analysts offer mixed views while some predict a bullish outlook, others are playing it cautiously, with price targets ranging from $185 to $358.

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