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 has increased by around 25% this year, and strong bank earnings could help it rise even more. This also creates chances for investing in leveraged ETFs.

The Direxion Daily Regional Banks Bull 3X Shares ETF follows a modified equal weight index of US regional banks, which helps it achieve better diversification and focus on smaller companies. Its expense ratio is 0.95%, similar to other leveraged ETFs that offer 300% exposure, but higher than non-leveraged options for US financials. Additionally, the regional banks in DPST are priced much lower compared to the broader US financials in the IYF ETF.

We have pointed out several top-performing leveraged equity ETFs that increased by 50% or more in the third quarter.

In July, investors' feelings shifted as the top performers of 2024 fell behind, while those that were previously underperforming moved ahead, resulting in a 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.