Scalper1 News
The whole of 2015 suffered losses on the market, and the final day of the year was no exception. While the broader market indices like the S&P 500 and Dow Jones Industrial Average were down 0.7% and 2.3%, respectively, in 2015, the closing bell of December 31 also failed to ring in cheer, as both indices lost more or less 1%. A hangover could be felt at the onset of the new year, and if morning shows the day, then 2016 has chances of seeing a weak start. Like 2015, an edgy global market backdrop, acute oil sector worries, the commodity market rout, a soaring greenback and weakening corporate earnings, geopolitical threats related to terror attacks and the influence of the all-important Fed will be replayed in 2016 as well. We are now gearing up for the Q4 2015 earnings season, with the S&P 500 earnings projected to decline 7.3% on 3.3% lower revenues. Barring the finance sector, the numbers are projected to reflect a 10.3% decline in earnings on a 3.1% fall in revenues, as per the Zacks Earnings Trends report issued on December 29, 2015. Per the report, earnings growth lacked luster, as depicted by the negative growth rate for the S&P 500 index in each of the last two earnings seasons. The scenario is expected to remain equally dull, as the present Q4 growth expectations are “the weakest of any other recent period at the comparable stage.” Needless to say, dull earnings will have adverse effects on the bourses. Probably sensing this turbulence in the market, the long-term U.S. treasuries have been behaving in a dovish manner even after the Fed lift-off. Yields on long-term treasuries have hardly budged since then. While these safe-haven bets are always there to pacify investors’ jittery nerves, they can also make short-term plays on the equity markets with the inverse ETFs. For these investors, we highlight the three non-leveraged inverse ETFs that could deliver higher returns if the market remains bearish (see: all the Inverse Equity ETFs here ). As a caveat, investors should note that these products are suitable only for short-term traders, as these are rebalanced on a daily basis. Still, for ETF investors who are bearish on the equity market for the near term, either of the above products could be an interesting choice. ProShares Short S&P 500 ETF (NYSEARCA: SH ) This fund seeks to deliver inverse exposure to the daily performance of the S&P 500 index. It is the most popular and liquid ETF in the inverse equity space, with AUM of nearly $1.63 billion and average daily volume of around 4.8 million shares. The fund charges 90 bps in fees and expenses. Though the product lost 4.3% in 2015, it added about 1% on December 31, 2015. ProShares Short Russell2000 ETF (NYSEARCA: RWM ) This ETF targets the small cap segment of the broad U.S. equity market from a bearish perspective. This is done by tracking the inverse performance of the Russell 2000 index. The fund has amassed $381.1 million and trades in heavy volume of 600,000 shares per day. The expense ratio comes in at 0.95%. RWM was up 0.1% in the last one year, but gained 1.3% on December 31, 2015. ProShares Short Dow 30 ETF (NYSEARCA: DOG ) This product seeks to deliver inverse exposure to the daily performance of the Dow Jones Industrial Average, which includes 30 blue chip companies. The fund has managed $324.2 million in its asset base, while it charges 95 bps in fees and expenses. Volume is moderate, as it exchanges less than 850,000 shares per day, on average. DOG gained more than 1% in on December 31, 2015, but shed about 3% in the last one year. Original Post Scalper1 News
Scalper1 News