The fears of rising interest rates, and inflation that have been piquing investors are now starkly overshadowed by a full-blown Russian invasion of Ukraine.
President Joe Biden and U.S allies have imposed sanctions on Russia including the pausing of a key natural gas pipeline between Germany and Russia; financial restrictions on Russian oligarchs and banks; as well as an end to the trading of Russia’s government bonds on exchanges in the U.S. and other allied countries.
What Happened: President Vladimir Putin ordered Russian forces to invade Ukraine early Thursday morning in a massed assault by land, sea and air signaling the largest attack on one European state since World War II.
Western leaders warned that even harsher punitive measures will be unleashed in the event Russia moves further into Ukraine.
Why It Matters: Russia is an energy hub for Europe, supplying 40% of Europe’s energy and 35% of the continent's gas.
Oil prices have spiked above $99 for the first time since 2014, stoking further inflation pressures at a time when growth in the U.S. CPI is at a 40-year high.
If more sanctions are imposed, it could lead to potentially less oil on the market if the country’s energy sector is targeted.
Other countries have said the strategy employed by the Organization of the Petroleum Exporting Countries Plus (OPEC+), to boost oil production gradually is enough to balance the market and there is no need for a hurry to ramp up production, making leveraged energy ETFs interesting plays.
We’ve gathered a list of them here:
Direxion Daily Energy Bull 2X Shares ERX ERX Direxion Daily Energy Bull 2X Shares creates two times leveraged position in the Energy Select Sector Index. Expense ratio of ERX is 1%. Price action: 35.51% higher year-to-date.
Direxion Daily S&P Oil & Gas Exploration & Production Bull 2X Shares GUSH: The Direxion Daily S&P Oil & Gas Exploration and Production Bull 2X Shares offers two times exposure to the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index. The expense ratio of GUSH is 1.14%. Price action: 16.72% higher year-to-date.
MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETN OILU: The MicroSectors Oil and Gas Exploration & Production 3X Leveraged ETN is linked to three times leveraged performance of the MicroSectors Oil & Gas Exploration & Production Index. The index provides exposure to the large-capitalization companies that are domiciled and listed in the United States and that are active in the exploration and production of oil and gas. OILU charges investors 95 bps in annual fees and expenses. Price action: 52.76% higher year-to-date.
MicroSectors U.S. Big Oil Index 3X Leveraged ETN NGRU: The MicroSectors U.S. Big Oil Index 3X leverages exposure to the Solactive MicroSectors U.S. Big Oil Index, which is equal-dollar weighted and provides exposure to the 10 largest U.S. energy and oil companies. The expense ratio is 0.95%. Price action: 55.49% higher year-to-date.
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