The initial excitement and optimism led by the reopening of businesses took a turn for the worse yesterday, and the 3-week equity rally halted. US equities saw one of its biggest drops in 12-weeks as news broke that cases in the US have spiked in 3 of its largest cities after the reopening of businesses.
In the news
- Global cases for the Covid-19 pandemic has now topped 7.5 million, with more than 2 million being reported in the US.
- The US has seen more than 115,000 fatalities from the virus, and numbers are fast rising with almost 1,000 deaths a day.
- Concerns have spiked over the longer-term impact that the pandemic would have on the global economy, reversing the climb global financial markets had enjoyed in the prior 3-weeks.
- While businesses have been gradually reopening, timeframe businesses will require to get back on track remains a concern. The US have already seen more than 44 million file for unemployment benefits, and its unemployment rate jumping to more than 13%.
- The spike in cases have also led to worries that a 2nd wave would take place – causing a risk that the economy may need to be locked down again to safeguard the citizens.
Another Sell Off?
- US equities saw major sell-off on Thursday (11 June) as fears took over the initial market excitement.
- The S&P Index slid 5.9% lower, while the Dow tumbled 6.9%
- The weakness nudged European equities lower, and Asian markets also followed suit.
Opportunities at TradePlus
- While the tech story has been all the rage, it was not spared from the sell-off that swept through the US market on Thursday.
- However, with the Leveraged, and Inverse series, investors are able to take the opportunity to capitalise on weakening market trends through the Inverse ETFs.
- The TradePlus NYSE FANG+ Daily (-1x) Inverse Tracker, which aims to provide a -1x daily return of the NYSE FANG+ Index rose 4% as the broader market tumbled.
- Similarly, the TradePlus HSCEI Daily (-1x) Inverse Tracker, which aims to provide a -1x daily return of the HSCEI Index gained 2.1% yesterday after the HSCEI slid 2% lower.
- After taking a back seat recently from the rise in risk appetite, Gold has also been clawing its way back into the limelight, and the TradePlus Shariah Gold Tracker is seeing a gradual climb in price again.
Table 1: Snapshot of how the TradePlus ETFs have performed (as at 11 June closing)
Table 2: Snapshot performance of major indices
Learn more about TradePlus ETFs
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