DPST ETF

Despite concerns about the upcoming third-quarter earnings season, the U.S. regional banking sector has surprised many, as noted by JPMorgan Chase analyst Anthony Elian. Smaller and mid-sized banks have reported stronger-than-expected financial results, suggesting that the sector could experience ongoing growth.

The S&P 500 Financials sector is up about 25% this year and a spate of positive bank earnings can continue to push the sector higher. Additionally, it opens up opportunities in leveraged ETFs.

The Direxion Daily Regional Banks Bull 3X Shares ETF tracks a modified equal weight index of US regional banks, giving it greater diversification and a small-capitalization tilt. DPST's expense ratio stands at 0.95%, in line with other 300% leveraged ETFs, but above non-leveraged ETF alternatives for US financials. DPST's underlying regional banks holdings trade at a significant discount relative to US financials held in the broad IYF ETF.

We have highlighted a bunch of the best-performing leveraged equity ETFs that have gained 50% or more in the third quarter.

The month of July marked a change in investors' sentiment as the leaders of 2024 became the laggards and vice versa due to market rotation.

Wall Street was moderately upbeat last week.

The fluctuation of interest rates can provide a plethora of trading opportunities. Three areas where the prospect of rate cuts could produce bullish results is in regional banks, small-cap equities, and home builders.

DPST: Regional Banks Teeter As NYCB Gets Junk Rating

Banks that rely heavily on lending products for revenue have been hit by higher interest rates. But capital markets expect rate cuts in 2024.