Michael Johnston is senior analyst for ETF Database.
Many analysts are building up the coming weeks as one of the most important earnings seasons in recent memory, a report card on the strength and sustainability of the economic recovery in the U.S. So far, the grades have been stellar.
Intel (INTC) revenue and profits declined from a year ago, but the chipmaker managed to beat Wall Street's expectations, indicating that the battered chip industry may be on the brink of a comeback.
In the financial sector, JPMorgan Chase (JPM) reported much better-than-expected results on the back of strength in its investment banking unit. Despite continued loan losses, JPMorgan saw "broad-based growth" in several of its businesses, according to chairman and CEO Jamie Dimon. The upbeat results gave hope to investors expecting most major financial institutions to post earnings declinesWhile Intel and JPMorgan represent only small portions of most technology and financial ETFs, their good news should send most sector-based funds higher on Wednesday, as the upside surprise from these firms is deemed not to be company-specific, but rather due to an improving economic environment and more favorable business climate. JPMorgan's stellar results are good news for broad-based financials ETFs, including the iShares Dow Jones U.S. Financial Services Index Fund (IYG), Vanguard Financials (VFH) ETF, and Financial Select Sector SPDR Fund (XLF). These funds are dominated by holdings in mega-banks like JPMorgan, Bank of America (BAC), Wells Fargo (WFC), Goldman Sachs (GS) and Citigroup (C), many of which are scheduled to issue earnings reports in coming weeks. Intel's unexpected results have had a more wide-reaching impact. In addition to boosting U.S. technology funds such as Technology Select Sector SPDR (XLK) and the iShares Dow Jones U.S. Technology Sector Index Fund (IYW) ETF (as well as more targeted tech ETFs like the PowerShares Dynamic Semiconductors Portfolio (PSI), expectations for a recovering tech sector gave a boost to tech-heavy Asian economies, including Australia and South Korea.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV