Looking at the finer details of U.S. president Joe Biden’s infrastructure plan reveals its intention to bridge the gap in the country’s digital divide, which could help boost the Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL).
While Biden’s plan is mostly seen as a vehicle to repair much of the nation’s infrastructure like roads and other means to facilitate transportation, the internet is one aspect that might be overlooked. With a heavier reliance on the internet during the height of the pandemic in 2020, some people were left in the cold due to limited or no internet access.
“President Biden’s proposed $2 trillion infrastructure plan seeks to do for the internet what it also promises to do for the nation’s decaying bridges, roads, ports, airports and transit systems: Ensure safe access to necessary services,” a MarketWatch report noted.
“The ‘digital divide’ was accentuated during the coronavirus pandemic, as children unable to connect to online classes — especially in households with brothers or sisters doing the same — were left behind,” the report added. “The American Jobs Plan promises roughly $100 billion over 8 years to bring high-speed broadband to the masses, especially in rural America, which every president since Ronald Reagan has vowed to help connect to faster telecommunications services.”
Traders can use WEBL as a way to play this infrastructure build to increase and enhance internet usage. With a gain of over 320% the past year and 22% year-to-date, the fund makes for an enticing trade to play Biden’s infrastructure proposal.
WEBL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Dow Jones Internet Composite 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.
Challenges Remain for the Infrastructure Proposal
Of course, pushing the infrastructure through Congress won’t be easy. Biden’s plan will more than likely get the perfunctory pushback from Republicans.
“President Biden is poised to waste billions of dollars and hurt private investment in our networks without actually closing the digital divide,” said Rep. Cathy McMorris Rodgers of Washington in the MarketWatch report.
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