Welcome back [music] to the opening bell. I'm Alex Coffee in for Nicole Pedal. Let's get you set up for the trading day and week.And joining us now from the New York Stock Exchange is Chris Versace. Chris of course a portfolio manager for the Street Pro portfolio and the chief investment officer of Tamatica Research. All right.Uh hey, nothing's going on this morning, right Chris. Um I was just talking with Kevin Green at the top of the show and I said we do all this work over the weekend and then you just t ...

Group 1 - The ProShares UltraShort Financials ETF is a leveraged inverse ETF that bets against the S&P Financial Select Sector index, which includes financial services stocks in the S&P 500 [5][6] - The ETF aims to deliver -2x the daily performance of the underlying index, which means if the index gains, the ETF is expected to lose twice that amount [6] - The current price of the ProShares UltraShort Financials ETF is $27.71, with a 52-week range of $23.86 to $44.19 [9] Group 2 - The financial services sector is viewed as a value destination and a source of dividend growth, despite some investors' lingering fears from the Global Financial Crisis [2][4] - The ETF can serve as a tactical tool for short-term traders, providing a hedge against long positions in financial stocks, particularly in response to sector-specific news [10][11] - The ETF is not suitable for long-term investments, as leveraged ETFs are designed for short-term trading and may not meet their stated objectives over extended periods [9][10]

Core Viewpoint - ProShares Short High Yield ETF (SJB) provides inverse daily exposure to U.S. high-yield corporate bond performance, allowing investors to hedge against credit-spread tightening or manage below-investment-grade exposure [1] Investment Strategy - The strategy utilizes derivatives referencing diversified high-yield benchmarks, collateralized by cash and treasuries, with a daily rebalance to target inverse sensitivity [1] - It is designed to benefit from widening credit spreads or rising rates and risk premia, while typically lagging in stable growth environments with improving issuer fundamentals [1] Use Cases - SJB can serve as a portfolio hedge for drawdown management, a tactical overlay around event risk, or a temporary transition exposure when reducing high-yield allocations [1] - Suitable investors include multi-asset allocators managing downside buffers and credit-oriented managers seeking cost-efficient spread hedges without shorting individual bonds [1] Key Risks - Daily compounding and basis differences versus specific holdings can create tracking gaps, and the fund may incur drag during calm or rallying credit markets where carry dominates [1]

Core Viewpoint - Apple is currently trading at a high valuation with a trailing P/E of 36x and a forward P/E of 33x, despite lacking a blockbuster product recently and only achieving a 10% return over the past year [1][2]. Valuation Metrics - The company's valuation metrics indicate premium multiples, with a trailing P/E of 36x and a forward P/E of 33x, reflecting a richly valued status [2]. - Recent fiscal year earnings growth followed two years of stagnation, suggesting a potential shift in performance [2]. - Retail sentiment data from Reddit shows bearish sentiment scores between 32-38 on r/wallstreetbets, while r/stocks remains neutral [2]. AAPD ETF Overview - The Direxion Daily AAPL Bear 1X Shares (AAPD) provides -1x daily inverse exposure to Apple's stock price through derivatives, with an expense ratio of 0.01% and $18.9 million in assets under management [3]. - AAPD resets its exposure daily through rebalancing, which can lead to returns deviating from a simple inverse of Apple's performance over longer periods due to compounding effects [4]. Performance Characteristics - The ETF's asset base of $18.9 million impacts its liquidity, with daily volume and bid-ask spreads widening during periods of increased volatility, such as earnings announcements [4]. - AAPD is not suitable for long-term holding as it does not provide inverse returns of Apple's shares over extended periods due to daily rebalancing [5]. Comparison with TSLQ - The Tradr 2X Short TSLA Daily ETF (TSLQ) offers -2x leveraged inverse exposure to Tesla, with $315 million in assets under management, providing deeper liquidity compared to AAPD [6]. - TSLQ has a higher expense ratio of 1.17% and amplifies both gains and losses, accelerating compounding effects [6][7]. - AAPD offers unleveraged -1x inverse exposure, while TSLQ provides -2x leveraged exposure, highlighting differences in leverage structure and liquidity profiles [7].

Core Viewpoint - The discussion highlights the contrasting performance of different sectors, with a focus on the resilience of staples like Walmart amidst market fluctuations [1] Group 1: Company Performance - Mike Co. noted that staples, including Walmart, are performing well, indicating a preference for defensive stocks in uncertain market conditions [1] - Alibaba is compared to high-performance brands like Porsche, suggesting its strong position in the Chinese tech market [1] Group 2: Investment Strategies - The mention of PSQ, an inverse triple Q ETF, indicates a strategy to hedge against potential downturns in the tech sector over a short time frame of a few weeks [1]

Core Viewpoint - Defiance ETFs has launched the Defiance Daily Target 2X Short LLY ETF (Ticker: LLYZ), which provides investors with 2X inverse daily exposure to the performance of Eli Lilly and Company, allowing retail investors to seek enhanced downside exposure without needing a margin account [1][3]. Group 1: Fund Overview - LLYZ aims to deliver daily investment results of -200% of the daily performance of Eli Lilly and Company, utilizing derivatives such as swaps and options to achieve its leveraged objectives [2]. - The fund is designed for knowledgeable investors who understand the risks associated with seeking daily leveraged inverse investment results and are willing to actively monitor their portfolios [4]. Group 2: Company Profile - Eli Lilly and Company is recognized as a global leader in the pharmaceutical industry, known for its innovative therapies in areas such as diabetes, oncology, immunology, and neuroscience [3]. - The fund offers targeted inverse exposure for traders looking for amplified downside exposure without the need for a margin account, distinguishing it from direct investments in Eli Lilly [3]. Group 3: Company Background - Defiance, founded in 2018, specializes in thematic, income, and leveraged ETFs, positioning itself as a leader in ETF innovation [5]. - The company focuses on empowering investors to take amplified positions in high-growth companies through its first-mover leveraged single-stock ETFs [5].