324.50 +2.29 (0.71%)
After hours: 4:28PM EDT
|Bid||322.06 x 800|
|Ask||325.07 x 1200|
|Day's Range||319.62 - 330.32|
|52 Week Range||74.15 - 414.20|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||32.06%|
|Beta (5Y Monthly)||3.35|
|Expense Ratio (net)||1.08%|
There are myriad potential sector-level outcomes that could result following Election Day. Broadly speaking, it's expected that a victory by former Vice President and Democratic nominee Joe Biden would be beneficial to some already high-flying sectors, including technology.What HappenedThat's relevant for multiple reasons, not the least of which is the fact that technology is the largest sector weight in the S&P 500 by a wide margin. However, there are other implications for exchange traded funds, including the geared Direxion Daily Technology Bull 3X Shares (NYSE: TECL).TECL looks to deliver triple the daily returns of the Technology Select Sector Index, a benchmark heavy on Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT).Why It's Important: Obviously, TECL is a geared ETF, a triple-leveraged one at that, meaning there's substantial risk in holding the fund from now through Election Day. However, electoral outcomes are among the events that increase the allure of leveraged ETFs as short-term trading instruments, meaning TECL could be worth a look immediately following Election Day."Joe Biden has vowed to get tough on big tech and tax breaks should he win the U.S. presidential race in November, but analysts and legal experts note current global uncertainties could hinder the Democratic challenger from shaking up Silicon Valley in the near term," according to S&P Global Market Intelligence.That's good news because some Biden chatter, if it evolved beyond that point, could TECL's bearish cousin, the Direxion Daily Technology Bear 3X Shares (NYSE: TECS), in play."Biden has pledged to raise the corporate tax rate to 28% from 21%, undoing some of the tax cuts implemented under the Trump administration," according to S&P Global. "The former vice president also aims to set a minimum tax of 15% on companies' book income, or profits reported to shareholders, and to raise taxes on foreign earnings of U.S. companies located overseas -- two policies that directly impact the U.S tech sector."What's NextWhat could make TECL a valid post-election trade is if Congress remains split and more details emerge from Biden, assuming he wins, on his tax plan."It is unclear how much Biden's proposed increase will impact tech firms, as the tech sector is notorious for having an effective tax rate that is significantly lower than the statutory rate, or the percentage set by federal law," notes S&P Global. "Companies report their effective tax rate as a calculated figure that includes federal, state, local and foreign taxes, as well as various tax breaks."See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Reasons To Believe In A Tempting Tech ETF * Tech Tumble Didn't Chase Traders From Geared Sector ETF(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The darling technology sector took some lumps earlier this month, but consensus wisdom appears to be that was a mere blip and the group will get its groove back if it's not already doing so.What HappenedOf course, that would be beneficial to the Direxion Daily Technology Bull 3X Shares (NYSE: TECL), which is one of the premier leveraged plays on the largest sector in the S&P 500.TECL tries to deliver triple the daily performance of the Technology Select Sector Index, essentially making the Direxion exchange traded fund a geared play on Apple, Inc. (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT) because those stocks combine for over 44% of the Technology Select Sector Index.Why It's ImportantWhen the technology sector hits bumps in the road, inevitably, there are calls that the 2000 tech wreck is going to repeat. Should that happen, TECL, predictably, would be a disastrous ETF to be holding. Fortunately, a 2000 sequel isn't brewing."When we compare the most recent run-up in IT to its counterpart from 20 years ago, we observe that the current relative outperformance of the sector is much less extreme than during the late 1990s," notes S&P Dow Jones Indices. "Moreover, the relative volatility of the IT sector was much higher then (December 1996-December 2000) than it is now, with an annualized standard deviation of daily relative returns of 23%--almost two and a half times the current period's standard deviation of 9.5% (December 2016-August 2020)."The 2000 bursting of the tech bubble washed out an array of flimsy companies. However, it's not a stretch to say that while the sector won't move up in a straight line, components in TECL's underlying index are far stronger today than they were two decades ago.What's NextThere is, of course, something to that strength, which is derived in large part from significant economic moats and fortress-like balance sheets. Additionally, that strength can augur well for reduced volatility with TECL."In 1999 and the present, IT had a strong tilt toward momentum and high beta and a tilt away from value," according to S&P Dow Jones. "However, one of the main differences between now and then is that IT currently has much stronger tilts toward quality and low volatility than it did in 1999. This suggests that the companies within the current IT sector are both more profitable and less volatile now than they were 20 years ago."See more from Benzinga * In First Year, Nifty Vegan ETF Struts Its Stuff * Tech Tumble Didn't Chase Traders From Geared Sector ETF * 4 Sector ETFs For September, Including A Pair Of Surprises(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
It would be reasonable to expect that last week's breathtaking declines among marquee technology stocks and the Nasdaq-100 Index would be all the impetus traders need to abandon leveraged tech exchange-traded funds, at least for the moment.What HappenedWith the likes of Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) punished last week, the Direxion Daily Technology Bull 3X Shares (NYSE: TECL) felt plenty of pain, too.TECL looks to deliver triple the daily returns of the Technology Select Sector Index, making it an easy target for downside when Apple and friends retreat.Why It's Important"I think we should start to anticipate a rotation--the momentum behind tech is going to ease," Seema Shah, chief strategist at Principal Global Investors, told the Wall Street Journal. "As we're seeing easing lockdowns and the prospect of a vaccine, people are beginning to go back to a more normal way of life, and reliance on tech is starting to fade from the peak where it was at the height of the lockdown."That may be the case over the near-term, but data suggest traders didn't go running for the hills with TECL amid the tech pullback. They did the opposite. Month-to-date, inflows to the leverage tech ETF are approaching $42 million.That's not a massive sum, but it says traders are convinced tech's early September retreat is a bump in the road, not cause for ongoing concern.TECL could be starting to get its groove back. Yes, the geared fund is lower by a staggering 23.17% over the past week, but it surged 9.28% on Wednesday on volume that was roughly 60% above the daily average, providing another sign traders that stick by the fund are being rewarded.What's NextOver the course of tech's ascent this year, retreats have been brief and rebounds rapid, scenarios that amplify the risk of holding a leveraged fund like TECL for more than a few days.Speaking of risk, some bold traders aren't shying away from making bearish bets against the beloved tech sector. To start September, nearly $10 million has flowed into TECL's bearish cousin - the Direxion Daily Technology Bear 3X Shares (NYSE: TECS).Interestingly, traders have been tempting fate with the bearish TECS for most of this year as highlighted by 2020 inflows of almost $97 million.See more from Benzinga * Collateralized Loan Obligations Come To ETF Land With 'AAA' Debut * Online Shopping ETF Has Post-Pandemic Utility * Election History Says Buy Biotech Dip(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.