Key Highlights

  • MicroSectors -3x Short Communication Services ETN rose 4.69% to $53.20 as screened on Friday, October 23.
  • The implied move in the communication services fund it tracks is a fall of roughly 1.56% (calculated, before fees).
  • Meta fell 6.98% to $648.85 on October 22 after reporting $34.91 billion of third-quarter capex, up 80%.
  • Netflix fell 5.31% to $65.04 on October 21 after guiding fourth-quarter EPS below consensus.
  • Alphabet reports third-quarter results on Wednesday, October 28 after the close.

XLCD Gain: Why Did a Short Communication Services Note Rise 4.69%?

MicroSectors -3x Short Communication Services ETN (CBOE:XLCD) rose 4.69% to $53.20 as screened on Friday, October 23. The note aims for three times the opposite of the daily return of an index tied to the Communication Services Select Sector SPDR ETF (XLC), so the screen implies that fund fell about 1.56%, calculated before fees.

The note is issued by Bank of Montreal, sponsored by MicroSectors, began trading on September 10, 2026 and charges 0.95% a year. It matures on July 31, 2046.

Meta Third Quarter: Why Did Strong Revenue Not Protect the Shares?

Meta (NASDAQ:META) reported on October 21 revenue of $64.60 billion, up 26% and above the roughly $63.3 billion expected. GAAP EPS was $3.83, or $7.40 excluding a $9.89 billion legal charge, and operating income was $12.99 billion.

The cost side dominated the reaction. Capital spending including finance leases was $34.91 billion, up 80%, free cash flow was negative $2.12 billion against positive $10.6 billion a year earlier, and 2026 capex was set at $135 billion to $145 billion. The shares fell 6.98% to $648.85 on October 22 on volume of 40.6 million.

Meta guided fourth-quarter revenue to $73 billion to $76 billion, and Reality Labs lost $4.13 billion in the quarter. Its board also approved a non-voting Class C share, to be issued from January 19, 2027, which added to questions about how the company will finance its building plans.

Streaming and Telecom: What Else Is Weighing on the Group?

Netflix (NASDAQ:NFLX) reported third-quarter EPS of $0.87 against $0.82 expected on October 20, but guided fourth-quarter EPS near $0.67 against $0.73 consensus. Its shares fell 5.31% to $65.04 on October 21.

Carriers also slipped early on October 23: T-Mobile (NASDAQ:TMUS) fell 3.65%, AT&T (NYSE:T) 2.55% and Verizon (NYSE:VZ) 2.01% in early trading. Verizon reports on Monday, October 26 before the open.

Alphabet Looms: What Do Investors Expect on October 28?

Alphabet (NASDAQ:GOOGL) reports on Wednesday, October 28 after the close, with revenue estimates around $127.4 billion to $131.8 billion. In July it raised its 2026 capex ceiling to $205 billion, and Google Cloud revenue grew 82%. Its first negative free cash flow, at $5.9 billion, kept attention on spending.

These facts explain why a heavy-spending debate among the biggest advertising and cloud companies can pull the whole sector fund lower in a single session.

Reset Risk: How Far Can a -3x Sector Note Move in a Day?

A calculated example: a 1.56% sector decline followed by a 1.56% rise leaves the sector 0.02% lower, but the note, after a 4.68% gain and a 4.68% loss, ends about 0.2% lower. Daily resets make results over several days differ from three times the opposite of the sector. This article is informational only.