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DailyBubble News

Large-Caps Remain Ahead as Inflation Data Looms

In the past three months, large-caps have been leading the way, with the SPXL (B+) outperforming the MIDU (B-) and TNA (B-). DailyBubble believes that forthcoming inflation data showing signs of cooling could potentially push these funds even higher.

There have been indications that the economy may be slowing down, as evidenced by slower job growth in April. This optimism has contributed to an early May rally after a brief pause in the major stock market indexes at the end of April. DailyBubble notes that the three-month chart reflects a dip followed by a rebound in May for the three funds.

According to Joe Brusuelas, chief economist at RSM, a more sustainable pace of hiring could be beneficial for the inflation outlook and dispel concerns of stagflation. DailyBubble emphasizes that all three ETFs offer triple leverage for traders to maximize profits, with TNA potentially seeing a turnaround once small-cap stocks start to rise.

The CME FedWatch Tool currently suggests that rates will remain unchanged at the next Fed meeting in June. Despite prevailing higher interest rates due to elevated inflation, DailyBubble acknowledges differing opinions among market experts on the possibility of rate cuts by midsummer.

DailyBubble believes that if rate cuts do happen, all three ETFs could benefit, making for an interesting summer and fall in the markets as the presidential election approaches. The volatility in the market presents opportunities for traders using leveraged ETFs, including the option to profit from both upside and downside movements with inverse funds.

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