A Super Bull Case? The Pieces are in Place Markets enter 2021 with plenty of tailwinds as vaccine rollouts and herd immunity improve the chances of a broad re-opening. The Fed continues to double down on its uber dovish monetary policy. Congress may pass a fiscal stimulus bill in the range of $1.5-1.9 trillion. This is in addition to a $900 billion package passed in December and a $2 trillion CARES Act from March. Why stop there? The Biden Administration has started work on an infrastructure bill to boost an already plump economy. In total, 2020 saw the biggest surge in money supply in the U.S. in 150 years! Consumers are flush with cash as Goldman Sachs recently reported that households have saved up approximately $1.5 trillion and this figure is expected to hit $2.4 trillion or about 11% of GDP. Companies are managing inventories at low levels and could be caught playing catch up if demand returns sooner than expected. When you pair the demand potential with the $8+ trillion in monetary and fiscal stimulus already in place, you have an economy ready for 'escape velocity'. Analysts are already bullish on the 2021 outlook. The average S&P target from15 Wall Street strategists is 4,082 according to CNBC. J.P. Morgan's Dubravko Lakos-Bujas has the highest price target in the group as he expects 26% growth to drive the S&P to 4400. Goldman's David Kostin is second at 4300. Analysts are not alone with regards to high expectations as a recent Bank of America Fund Manager survey showed that 73% of respondents believe the global economy is in the early-cycle phase of recovery. The bullish outlook has its risks. Valuations are in question and appear lofty according to most metrics. If vaccines fall short of efficacy expectations then governments could reverse reopening decisions. There is also the risk of central banks tightening policies too soon which could set off a 'taper tantrum' similar to 2013. Still, all the pieces for the super bull case are in play. Professional investors need to have the proper financial instruments that can track these developments and provide protection against adverse events. Direxion specializes in providing the decisive investor with the solutions that deliver the flexibility to position portfolios opportunistically. Direxion's Leveraged and Inverse ETFs allow traders to magnify short-term perspectives with daily 3x and 2x instruments, utilize bull and bear funds to trade volatility around increased liquidity, and allow investors to adapt against a rapidly changing market. Direxion is focused on the success of investors who use their products. They strive to provide innovative ETFs, and on-the-ground support to help investors execute strategies while educating clients on risks associated with leverage in a volatile market. In today's fast-moving, liquid environment, Direxion's leveraged and thematic ETFs, may be just the right solution for you. Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by a Fund increases the risk to the Fund. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment. An investor should carefully consider a Fund's investment objective, risks, charges, and expenses before investing. A Fund's prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund's prospectus and summary prospectus call 866-476-7523 or visit our website at www.direxion.com. A Fund's prospectus and summary prospectus should be read carefully before investing. - Market Disruptions Resulting from COVID-19. The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund.
- Direxion Shares Risks – An investment in the Fund involves risk, including the possible loss of principal. The Fund is non-diversified and includes risks associated with the Fund concentrating its investments in a particular industry, sector, or geographic region which can result in increased volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The Fund does not attempt to, and should not be expected to, provide returns which are three times the return of its underlying index for periods other than a single day. Risks of the Fund include Effects of Compounding and Market Volatility Risk, Leverage Risk, Market Risk, Market Disruption Risk, Aggressive Investment Techniques Risk, Counterparty Risk, Intra-Day Investment Risk, Daily Index Correlation/Tracking Risk, Other Investment Companies (including ETFs) Risk, and risks specific to the securities of the Retail Industry and Consumer Discretionary Sector. Retail and related industries can be significantly affected by the performance of the domestic and international economy, consumer confidence and spending, intense competition, changes in demographics, and changing consumer tastes and preferences. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
- Distributor for Direxion Shares: Foreside Fund Services, LLC.
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