ETF Sectors Struggling On Asia, Recession Concerns | ETF Trends

U.S. stocks are down again Monday as concerns about the violent protests in Hong Kong have created even more stress for bullish investors who are already weighed down by fears over the ongoing trade war between the U.S. and China.

The Dow Jones Industrial Average fell about 270 points, or 1.08%, while the S&P 500 fell 0.93%. The Nasdaq Composite is down 0.89%.

The majority of ETF sectors are showing losses today with the SPDR S&P BANK (KBE) down about 2%; the SPDR S&P RETAIL (XRE) down 1%, the Industrial Seclect SPDR (XLI) down 0.9%, the Energy SPDR (XLE) was down 0.75%, and the Materials SPDR (XLB) down 0.5%, as investors targeted more safe haven investments like Treasurys and gold.

Stocks had six consecutive down days in the market recently, culminating last Monday, but finally recovered some of their losses last Tuesday, only to resume the decline temporarily Wednesday, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all down about 1% after suffering much steeper losses in the overnight session. Wednesday’s losses brought both the Dow and S&P 500 down more than 3.8% for the month. The Nasdaq was down 4.3% for August. Then Friday the market started retracing its decline again.

With President Donald Trump stating recently, “We’re not ready to make a deal, but we’ll see what happens,” he said. “We’ll see whether or not we keep our meeting in September,” investors now fear that there is no end in sight to the trade war.

Bank of America on Monday raised chance of a recession to more than 30% in the next 12 months as the firm believes many economic indicators are “flashing yellow.”

“The bear is alive and kicking. We think the failed breakout last week for the S&P 500 confirms we are still mired in a cyclical bear market,” Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said in a note on Monday.

While the bulls have had a tough time lately, bearish market views are enjoying rapid gains using inverse ETFs like the ProShares Short S&P 500 (SH), the Direxion Daily Small Cap Bear 3X Shares (TZA), the ProShares Short Russell2000 (RWM), and the Direxion Daily Semiconductor Bear 3X Shares (SOXS). Of course investors should use caution when trading highly leveraged instruments, and monitor investments daily.

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