A Big Week Looms For These Consumer Cyclical ETFs

Among the sectors seeing a spate of earnings reports this week is consumer discretionary, the S&P 500's fourth-largest sector weight and home to some of the best-performing large-cap stocks this year.

What Happened

The Consumer Discretionary Select Sector Index (IXYTR) is up 23.38% year-to-date, indicating the Direxion Daily Consumer Discretionary Bull 3X Shares WANT and the Direxion Daily Consumer Discretionary Bear 3X Shares PASS could be tested amid the sector deluge of earnings reports this week.

The bullish WANT looks to deliver triple the daily returns of the Consumer Discretionary Select Sector Index while the bearish attempts to sport triple the daily inverse returns of that benchmark.

Why It's Important

To be precise 47.12% of that index reports earnings in the week ahead with about half that coming courtesy of Amazon.com Inc. AMZN on July 25. Analysts are expecting the e-commerce and cloud computing juggernaut to report a profit of $5.29 per share, up from $5.07 a year earlier. Shares of Amazon account for more than 23% of the Consumer Discretionary Select Sector Index.

Dow component McDonald's Corp. MCD, another bellwether among consumer cyclical names, reports on July 26. McDonald's is expected to report a quarterly profit of $2.06 a share, up from $1.99 a share a year earlier. The stock is the third-largest component in the Consumer Discretionary Select Sector Index at over 7%.

The combined market value of the consumer discretionary sector in the U.S. currently resides at $5.46 trillion with Amazon commanding $975 billion of that total.

What's Next

WANT and PASS are still less than a year old, meaning they are somewhat new on the leveraged sector ETF scene, but the funds are credible options for active traders lacking the capital to put on decent-sized positions in Amazon.

Plus, there are inklings some traders are starting to pay more attention to the leveraged consumer cyclical funds. For the five days ending July 18, volume in the bullish WANT was more than 58% above the trailing 20-day average, according to Direxion data.

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