This article was originally published on ETFTrends.com.
It is that time of the year again. As banks kick off the earnings season, investors will be keeping an eye on financial stocks and sector-related ETFs.
The financial sector was among the best performing areas of the market Monday and were on pace for their best single day gain in a month, with the Financial Select Sector SPDR (XLF) , the largest financial services-related ETF, up 2.0%, compared to the 0.8% rise in the S&P 500.
The gains in the financial segment were supported by a slight uptick in yields on government bonds, with 10-year Treasury note yields up to 2.856%.
Bank Earnings to Watch Out For
Looking ahead, investors will be watching out for J.P. Morgan (JPM), Wells Fargo (WFC), Citi (NYSE: C) and PNC Financial (PNC), which will all be reporting second quarter results before the market open on Friday.
XLF includes 11.1% JPM, 7.7% WFC, 5.3% C and 2.0% PNC.
“The market is anticipating a very good earnings season and ignoring any trade issues,” Paul Nolte, portfolio manager at Kingsview Asset Management, told Reuters. “We’re not likely to get much color on trade from this earnings, so the expectation is still for a very good season.”
For the second quarter of 2018, the estimated earnings growth rate for the S&P 500 is 20.0%, according to FactSet. If 20.0% is the actual growth rate for the quarter, it will mark the second highest earnings growth since Q3 2010 of 34.0%.
At the sector level, financials are expected to see the largest price increases at a positive 18.8% growth, according to FactSet analysts.
For more information on the financial sector, visit our financial category.
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