4 Geared ETFs for Alphabet Earnings

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

As is being widely noted, this week is kind of a big deal on the earnings front and the party really gets started on Tuesday. Before the bell, four Dow components report and the fun keeps going after the bell when Google parent Alphabet GOOG GOOGL deliver results.

Wall Street expects California-based Alphabet to deliver first-quarter earnings per share of $10.80 on revenue of $40.76 billion.

“Visibility remains low in our view on the impact and duration of the current environment on Alphabet’s key businesses, including Search, YouTube, Hardware, and Cloud,” said Stifel analyst Scott Devitt in recent note.

For those willing to wager that Alphabet disappoints and that it says it's being stung by a pullback in online advertising spending because of the coronavirus, here are a pair of bearish leveraged exchange traded funds to consider.

Direxion Daily Communication Services Index Bear 3X Shares (MUTE)

The Direxion Daily Communication Services Index Bear 3X Shares MUTE attempt to deliver triple the daily inverse returns of the Communication Services Select Sector Index (IXCTR).

While that benchmark is home to a slew of familiar and beloved growth names, it allocates over 23% of its weight to Alphabet stock, making it a potentially lucrative idea should the internet giant disappoint or guide lower and subsequently tumble post-earnings.

Direxion Daily Dow Jones Internet Bear 3X Shares (WEBS)

Having debuted last November, the Direxion Daily Dow Jones Internet Bear 3X Shares WEBS is one of the newer additions to Direxion's expansive lineup of geared ETFs.

WEBS looks to deliver triple the daily inverse returns of the Dow Jones Internet Composite Index (DJINETT), one of the most widely followed benchmarks dedicated to internet equities. The premise here is simple: WEBS's underlying index devotes 8.13% of its weight to the two share classes of Alphabet, making it a credible bearish play on the company's earnings.

For the bullishly inclined, here are a couple of levered ETFs that could be boosted by pleasant surprises in Alphabet’s earnings report, should that scenario come to pass.

Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL)

The Direxion Daily Dow Jones Internet Bull 3X Shares WEBL is the bullish counterpart to the aforementioned WEBS, meaning it seeks performance that's commensurate with triple the daily returns of the Dow Jones Internet Composite Index.

Assuming WEBL can deliver the goods and not torch investors following Alphabet’s report, the fund could be worth holding for a few more days (not much longer) as Facebook, Inc. FB and Twitter, Inc. TWTR report later this week.

Direxion Daily Communication Services Index Bull 3X Shares (TAWK)

The Direxion Daily Communication Services Index Bull 3X Shares TAWK is MUTE's bullish cousin, meaning this geared fund could rip higher if Alphabet delivers some good news and if Facebook does the same later this week. Those two stocks combine for about 42% of the underlying index's weight.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.