With the markets continuing to feed off news regarding a COVID-19 vaccine, certain sectors stand to benefit, such as healthcare and technology. Where does this leave sectors like retail, with holiday shopping just around the corner?

One ETF to watch will be the Direxion Daily Retail Bull 3X ETF (NYSEArca: RETL). RETL seeks daily investment results of 300% of the daily performance of the S&P Retail Select Industry Index.

With its triple leverage, RETL gives investors the ability to:

  • Magnify short-term perspective with daily 3X leverage;
  • Go where there’s opportunity, with bull and bear funds for both sides of the trade; and
  • Stay agile with liquidity to trade through rapidly changing markets

RETL invests in securities found within the index, which is a modified equal-weighted index that measures the performance of the stocks comprising the S&P Total Market Index. RETL traders have to wonder whether the positivism surrounding a vaccine can cause consumers to open up their wallets come Christmas time.

Of course, economic factors will play a hand in that, especially amid the pandemic, which has caused widespread unemployment in certain sectors. A boost from work-from-home opportunities could play a hand in more gains, but to what degree?

Can companies continue to evolve and thrive around the pandemic? These are just some questions that will need to be answered before diving into RETL.

RETL Chart

Right now, the retail sector has yet to tail the broader market with the current vaccine rally in addition to the presidential election. What it does from there is anybody’s guess.

“Of course, any large-scale rollout of a vaccine is months away,” a Barron’s report noted. “And even before the pandemic, people were shifting away from the traditional retail model, leading many companies to double down on offering unique experiences to attract customers. So while the market appeared jubilant on Monday, the actual impact of a vaccine on consumer stocks will take time to play out, and the landscape won’t simply return to business as usual.”

“Over last six months consumers didn’t sit still…thus we cannot expect to just flip the vaccine switch and go back to 2019,” says Kevin McCarthy, senior research analyst at Neuberger Berman. “Consumer muscle memory around value and convenience (a trend already under way) will be lasting. So yes, a vaccine provides a shot in the arm for full-service, but in a year from now, I think the market share gains from those that fit the Covid bill continues.”

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