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Should You Buy Bank ETFs After Q4 Earnings?

Neena Mishra

The major bank earnings reports are already in and they were in general better than expected. While trading businesses were down during the quarter, loan growth was decent. Credit quality was reported to be stable.

The KBW Nasdaq Bank index rallied 7.7% last week, its best one-week rise since the 2016 presidential election, per WSJ, making financials one of the top performing sectors year to date.

A flattening yield curve, concerns about the path of the monetary policy and trade war fears had spooked investors in December, leading to a sharp sell-off in bank stocks. Recent results have alleviated some of investor concerns.

Per Zacks Earnings Trends, we now have Q4 results from 26 of the 98 Finance sector companies in the S&P 500 index, accounting for 48.3% of the sector’s total market cap in the index.

Total earnings for these Finance companies that have reported are up +16% from the same period last year on +2.9% higher revenues, with 73.1% beating EPS estimates and 50% beating revenue estimates.

To learn more about the SPDR S&P Bank ETF (KBE), the Invesco KBW Bank ETF (KBWB) and the First Trust Nasdaq Bank ETF (FTXO), please watch the short video above. Bank of America (BAC), JP Morgan Chase (JPM) and Wells Fargo (WFC) are among the top holdings in these ETFs.

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Citigroup Inc. (C) : Free Stock Analysis Report
 
First Trust NASDAQ Bank ETF (FTXO): ETF Research Reports
 
SPDR S&P Bank ETF (KBE): ETF Research Reports
 
Invesco KBW Bank ETF (KBWB): ETF Research Reports
 
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