The S&P 500 is shaking off some volatility last week and returning to the upside, but whether or not it can sustain the current rally is anyone’s guess—a chance to play the Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL).
Two primary catalysts are the Federal Reserve and earnings reports. The markets wonder whether the former will give any indication of rate rises and if large cap tech can show up big in earnings.
“First, the Federal Reserve meets Tuesday and Wednesday,” a CNBC report said. “While no action is expected, there could be some mention of the central bank’s possible wind-down of its bond program. That could move the markets since the tapering of the central bank’s bond purchases is seen as the first step on the way to interest rate hikes.”
“Then there are about 165 S&P 500 companies releasing earnings reports, including the biggest tech names— Apple, Microsoft, Amazon, Alphabet, and Facebook. Tesla is reporting, as are industrial heavyweights Boeing and Caterpillar,” the report added. “There are a slew of consumer names, including Procter & Gamble and McDonald’s.”
HIBL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the S&P 500® High Beta Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments that track the index and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.
The Other Side of the Trade
If earnings reports disappoint big tech, it could be a bearish case to play the Direxion Daily S&P 500 High Beta Bear 3X Shares (HIBS). The S&P 500 could experience further volatility, giving investors more reason to worry about a stagnating recovery.
HIBS seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the daily performance of the S&P 500® High Beta Index. The fund invests in swap agreements, futures contracts, short positions, or other financial instruments that, in combination, provide inverse (opposite) or short leveraged exposure to the index equal to at least 80% of the fund’s net assets.
The index provider selects 100 securities to include in the index from the S&P 500® Index with the highest sensitivity to market movements, or “beta” over the past 12 months as determined by the index provider.
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