Aerospace and Defense is Key For Investors in Industrials

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Roughly 70% of S&P 500 companies have reported earnings according to data from FactSet. So far, the average earnings growth rate year-over-year for the fourth quarter is 13.3%, beating expectations of 10.9%, which was revised downward from 12% in early December. The downward revisions come as many economists and strategists see weakening global growth in the U.S., Eurozone, and China.

Perhaps more importantly, 53 S&P 500 companies have revised guidance downward, while only 12 have guided upward. Meanwhile, the S&P 500 is up 9.4% year-to-date, while many Wall Street strategists are calling for gains on the index of between 9% and 15%.

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One sector in particular that has performed particularly well for the fourth quarter was Industrials. Roughly 86% of industrials who have reported fourth quarter earnings beat expectations, according to FactSet. The Dow Jones Industrial Average is up 8.86% on the year. 

But beware going forward, says Zev Fima, research analyst for Jim Cramer's Action Alerts Plus charitable trust portfolio. Plus, the aerospace and defense business is one in particular investors should pay attention to, as demand for those goods is trending upward. Boeing Co. (BA) - Get Report , in particular reflects this trend the most. 

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