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Lyxor cross-lists 2x leveraged Nasdaq 100 ETF on Xetra

Lyxor has listed its Lyxor Nasdaq-100 Daily (2x) Leveraged UCITS ETF on Deutsche Börse’s Xetra platform. The fund provides twice the daily return of the tech-leaning large-cap index.
The post Lyxor cross-lists 2x leveraged Nasdaq 100 ETF on Xetra first…

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Lyxor has listed its Lyxor Nasdaq-100 Daily (2x) Leveraged UCITS ETF on Deutsche Börse Xetra.

Lyxor cross-lists 2x leveraged Nasdaq 100 ETF on Xetra

The Nasdaq 100 has clocked up a gain of 41.2% year-to-date.

The new share class trades in euros under the ticker L8I7 GY.

The fund provides twice the daily return of the Nasdaq 100 Index, one of the world’s preeminent large-cap growth-oriented indices.

The index tracks the performance of 100 of the largest US and international non-financial companies by market capitalization listed on the Nasdaq stock market, subject to various diversification requirements.

The index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology.

It does not contain securities of any traditional financial companies or investment companies. Technology stocks account for more than 48% of the index.

Known for being a technology-heavy index, major constituents include tech titans such as Apple, Microsoft, Amazon, Alphabet, Facebook, Tesla, Nvidia, Adobe, PayPal, and Netflix.

The Lyxor Nasdaq-100 Daily (2x) Leveraged UCITS ETF debuted on Euronext Paris (Ticker: LQQ FP) in euros in April 2018 and comes with an expense ratio of 0.60%.

It currently houses €220 million in assets under management, highlighting the strong demand for tactical exposure to this segment.

The Nasdaq 100 Index has been among the best-performing equity indices this year, clocking up a gain of 41.2% year-to-date, as measured in US dollars, as of 4 December. The index has been a net winner during the coronavirus pandemic owing to its significant allocation to technology companies and, to a lesser degree, biotechnology firms that have benefited from social-distancing restrictions and increased spending on healthcare respectively.

In October, Lyxor reduced the expense ratio on its regular Nasdaq 100 fund, the $1.7bn Lyxor Nasdaq-100 UCITS ETF, from 0.30% to 0.22%, making it the cheapest UCITS ETF in Europe for this exposure.

This ETF is synthetically replicated and maintains listings on Euronext Paris (UST FP), Borsa Italiana (UST IM), London Stock Exchange (NASD LN / NASL LN), and Xetra (LYMS GY).

The post Lyxor cross-lists 2x leveraged Nasdaq 100 ETF on Xetra first appeared on ETF Strategy.

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Government

Bears Remain In Control as King Dollar Rallies to Record 20-Year High

Last week was particularly tough for investors as all 11 sectors experienced losses of some extent. The S&P fell 4.6% after the Fed telegraphed that…

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Last week was particularly tough for investors as all 11 sectors experienced losses of some extent.

The S&P fell 4.6% after the Fed telegraphed that more tightening of short-term rates lies ahead by year’s end, when it was thought that the Fed would “hike and hold,” allowing the three 75-point rate increases of June, July and September to work through the system. It is well understood that any rate increase takes about six months before its full effect is felt in the economy, and the market soured on the notion that the Fed might overshoot.

The S&P has now shed 23% year to date and came within 10 points of the June 3,647 low as the third quarter comes to a close. This kind of price action puts pressure on fund managers trying to window dress portfolios to show they have the right blend of risk and cash, which just happens to be at an extreme level that has historically defined a market bottom going back to the dot-com crash.

The S&P 500 ended Friday’s session at 3,693.23, down from last Friday’s closing level of 3,873.33. This follows a 4.8% tumble the previous week ahead of the Federal Open Market Committee (FOMC) meeting last week that pushed the market benchmark’s slide during the last two weeks to 9.2%. With just one week remaining in the month, this puts the S&P 500’s decline for September to date at 6.6%.

The Dow took out its low for 2022 but doesn’t carry the same technical implications as a priced weighted index. The Nasdaq and Russell 2000 also tested their June lows last Friday.

A view of the five-year chart of the S&P shows the long-term uptrend line coming in to play at 3,570 or roughly 3.6% below where the market closed Friday. Looking at the breach of this line in May 2020 was due to panic selling from the Covid-19 outbreak that quickly repaired itself when emergency stimulus was enacted. The previous test in November 2018 was brought on by the market’s “taper tantrum” when the Fed threatened to hike rates back then.

The current Fed Funds rate stands at 3.00%-3.25% with the Fed laying out a dot-plot plan for a year-end target of 4.4% that would take 30-year mortgage rates above 8.0% by some estimates. It now appears that after the Fed has popped the equity balloon, the U.S. central bank now is targeting the housing market to bring down rent inflation as well as the labor market where wage inflation has been very prominent.

Both forces will be harder to conquer than deflating the stock market. Record housing prices could easily give back 10% on a national basis and as much as 25% in some of the hottest and most overpriced markets such as Boise, Idaho; Austin, Texas; Charlotte, North Carolina; Nashville, Tennessee; Phoenix, Arizona; San Diego, California; and Tampa, Florida.

Bringing wages down will be near impossible without widespread layoffs. With the labor market staying tight with net new jobs created each month, inflation may be long lasting.

Other central banks outside the United States raised rates in lock step with the Fed, even after data showed a significant decline in economic activity in Europe that portends of a hard landing for the region. Energy prices pulled back further in reaction to the data.

That drop in energy prices is somewhat counterintuitive to the headline that Russia’s President Vladimir Putin is calling up 300,000 reservists to fortify his forces in Ukraine, sending a clear signal he is digging in and not in willing to negotiate or submit to calls by global leaders to stop the war he started on Feb. 26.

Inflation is clearly coming down across the commodity markets. Everything from crude, natural gas, gasoline, wheat, corn, soybean, sugar, lumber, cotton, copper, cattle, lean hogs and copper prices are pulling back with the CRB Index returning to levels not seen since this past March. These broad price declines will certainly show up in the forthcoming inflation data.

This week, investors will receive key data on the housing market, economic growth and inflation. Tuesday will feature releases of August new home sales, as well as the S&P Case Shiller US home price index for July, followed by the pending home sales index for August on Wednesday.

Thursday, Q2 revised gross domestic product will be released, followed by the Friday release of the Personal Consumption Expenditures, or PCE, price index, a closely watched inflation reading, for August. That price index is the Fed’s preferred inflation barometer.

The market is grasping for any hints of inflation ebbing from the June peak, but much of the current downturn in commodities took place in September. In this regard, the large basket of housing data (FHFA Housing Price Index for July, Case-Schiller Home Price Index for July, New Home Sales for August, MBA Mortgage Applications Index for the week ending Sept. 24 and Pending Home Sales for August) will likely matter the most when weighing the huge influence housing has on gross domestic product (GDP).

Sources: www.bea.gov

The biggest headwind for the market continues to be the powerful rally in the U.S. dollar against all developed and emerging market currencies. Charts of the pound sterling, euro, yen, looney, krona and yuan are in protracted downtrends. The combination of the Fed’s monthly quantitative tightening (QT) of $95 billion coming out of the financial system and the flight to safety is fueling a major upside move in the greenback.

One wonders what sort of headline it will take to turn the tide and bring confidence back to the market. It will take probably several headlines about inflation being on the decline, some better-than-expected earnings from companies of market leading stocks and a change in the makeup of Congress come election time. With stocks in extreme oversold territory, a 7%-10% rally is probably in the cards near term that gets the S&P back up to 4,000 where the 50-day moving average lies overhead. From there, Mr. Market will have a lot of wood to chop to break the dollar and bring back the bulls.

The post Bears Remain In Control as King Dollar Rallies to Record 20-Year High appeared first on Stock Investor.

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Spread & Containment

Step Back to the Monthly Chart on Transportation

Last Friday, I spoke on Women of Wall Street Twitter Spaces and Fox Business’s Making Money with Charles Payne to talk about a key monthly moving average.What…

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Last Friday, I spoke on Women of Wall Street Twitter Spaces and Fox Business's Making Money with Charles Payne to talk about a key monthly moving average.

What makes this moving average so important right now is that three of the Economic Modern Family members are testing it. The three members, Granddad Russell 2000 (IWM), Grandma Retail (XRT) and Transportation (IYT), well deserve their status as what Stanley Druckenmiller calls the "inside" of the U.S. economy. In fact, the components of the modern family were put together before we heard Druckenmiller's viewpoint. We have observed how predictive they all are in helping us see in advance the next big market direction. Hence, these "inside" indicators -- right now -- are all sitting just above a 6–7-year business cycle low.

For the purposes of this daily and because we have featured this sector a lot lately, the chart of IYT is a perfect example of this moving average and what to watch for. Except for the brief blip in 2011 when the government shut down, and then again during the pandemic, IYT has sat above the dark blue line for 11 years. Currently, that line sits at the 195 area. The same is true with IWM and XRT, both marginally holding their monthly MAs.

So, watch IYT to either hold, and begin a rally possibly back closer to 220, or for IYT to fail 195, in which case we see the whole market selling off further.

To note, the other family members, such as Sister Semiconductors (SMH) and Prodigal Son Regional Banks (KRE) are still sitting well above the monthly MA. Big Brother Biotechnology (IBB), however, is now trading below it. And not in the family, but still notable, is the REIT sector (IYR), also sitting below it. SPY has the same MA, only that one sits at 310 (a long way off).

Incidentally, junk bonds broke down under this moving average in November 2021. The market has been slow to take junk bond's hint.

For more information on how to invest profitably in sectors like biotech, please reach out to Rob Quinn, our Chief Strategy Consultant, by clicking here.

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Mish in the Media

A business cycle is about 6-7 years - where are the indices now and what should you watch for? Mish discusses this question in this appearance on Fox's Making Money with Charles Payne.


ETF Summary

  • S&P 500 (SPY): Testing the previous low; 362 support, 370 resistance.
  • Russell 2000 (IWM): Broke the June low of 165.18; 162 support, 170 resistance.
  • Dow (DIA): Broke June low - 289 support, 298 resistance.
  • Nasdaq (QQQ): Testing the June low; 269 support, 280 resistance.
  • KRE (Regional Banks): Relative outperformer; 57 support, 61 resistance.
  • SMH (Semiconductors): 187 support, 194 resistance.
  • IYT (Transportation): 196 support, 200 resistance.
  • IBB (Biotechnology): 112 support, 118 resistance.
  • XRT (Retail): 55 support, 60 resistance.


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

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Bonds

What will happen to Bitcoin and Ethereum if traditional markets break?

Multiple indicators of economic health all point to a severe recession hitting the US and global economy soon. What could this mean for crypto investors?

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Multiple indicators of economic health all point to a severe recession hitting the US and global economy soon. What could this mean for crypto investors?

Michael J. Burry, the financial wizard who was portrayed in the movie "The Big Short", is known for predicting crises. For instance, his investment fund made billions from the 2008 housing crash, and Burry liquidated almost all his entire portfolio during the 2Q of 2022.

Given that no one seems to know whether traditional markets will bounce before entering a further recessive environment, it might be a good time to consider investing in cryptocurrencies. Below are some examples on how experienced investors sometimes miss incredible rallies.

In May 2017, Burry said people should expect a "global financial meltdown" and World War 3. Instead, the S&P 500 rallied 20% over the following 9 months. A couple of years later, the index peaked in December 2021, at a level that was more than 100% above Burry’s suggested short entry price.

In December 2020, Burry said that Tesla's stock price was "ridiculous" as part of his justification for opening his short position. A 47% rally happened in the 35 days following that remark and Tesla shares peaked 10 months later after a 105% total gain from Tesla’s supposedly "ridiculous" price.

Indicators point to a major recession, but exactly when remains unknown

Without mistake, traders should not dismiss the fact that the U.S. dollar index has rallied strongly against other major global currencies to reach its highest level in 20 years. This shows that investors are desperately seeking shelter in cash positions, exiting stock markets, foreign currencies and corporate debt.

Moreover, the gap between the U.S. Treasury 2y-year and 10-year notes widened to a record-high -0.57% on Sept. 22. Typically, when shorter-term government bonds have higher yields than long-term bonds — an inverted yield curve — it's interpreted as heightened signs of a recession.

Adding to the concerns, on Sept. 22, the U.S. Federal Reserve reported an all-time high of $2.36 trillion in overnight reverse repurchase agreements. In a "reverse repo," market participants lend cash to the FED in exchange for U.S. Treasuries and agency-backed securities. The excessive cash in investors' balance sheets indicates a lack of trust in counterparty credit risk, which is a bearish indicator.

After laying out the three critical macroeconomic indicators hitting levels not seen in over 2 decades, two important questions are left. First, what is Bitcoin (BTC) and Ether (ETH) relation to traditional markets? More importantly, what impact should investors expect if the S&P 500 drops 20% and the housing market crashes?

Regardless of whether a person pays their bills using cryptocurrencies, energy prices, food and healthcare services are heavily dependent on the U.S. dollar. Commodity international transactions are mostly priced in USD, including imports, exports and the actual trading. So even if one pays their expenses using Bitcoin, odds are somewhere along the way, this value will be converted into fiat money.

The cost of borrowing USD impacts multiple economies

The main takeaway from the lack of an effective circular trade exclusively using cryptocurrencies is that everyone's life depends on the U.S. dollar's strength and borrowing cost. Unless one lives in a cave, isolated in a self-sufficient land, or on some communist island, when investors hoard cash and interest rates skyrocket, every market is impacted.

As for an eventual housing market collapse or another 20% crash in stock markets, the truth is its impact on Bitcoin and Ether are impossible to predict. From one side, there's the pressure from holders scrambling to reduce their exposure and secure a cash position for an eventual longer-than-estimated crypto-winter. On the other hand, there could be a surge in investors looking for non-confiscatable assets or seeking protection from inflation.

That's why Michael J. Burry's story becomes relevant right now when every pundit and market analyst claims a near-future market collapse or the potential crash in housing prices. Bitcoin and Ether are facing an imminent global recession for the first time, and judging by March 2020, when a panic selling triggered by the Covid-19 crisis, those that stood for the long run were rewarded.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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