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Wall Street has been on a hot streak over the past month, with November on track to become the strongest month of the year. The retreat in bond yields, on continued hopes that the Fed’s aggressive interest rate hiking campaign might be nearing an end, has been a significant contributor to the stock rally.

Coming to the latest earnings reporting cycle, the overall Q3 earnings picture remains stable and largely positive. The third-quarter reporting cycle is on track to record year-over-year earnings growth after three back-to-back quarters of earnings decline. However, there has been a notable acceleration in negative estimate revisions for the fourth quarter over the last few weeks, a development that reverses the largely favorable revisions trend of the preceding six months.

Total third-quarter earnings of 468 S&P 500 members, or 94% of the index’s total membership, are up 1.5% from the same period last year on 1.8% higher revenues, with 81.6% beating EPS estimates and 62% beating revenue estimates. While the earnings growth rate and beat ratio show a notable improvement from the preceding quarter, the revenue growth pace represents a clear decelerating trend. The revenue beat ratio is the lowest since the first quarter of 2020.

Given this, most equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period. Below are five ETFs from different sectors that have gained from strong earnings and a soaring stock market. We have provided a chart for their performances over the past month and compared them with the broader market fund (SPY - Free Report) and the broader sector.

Aerospace: iShares U.S. Aerospace & Defense ETF (ITA - Free Report)

iShares U.S. Aerospace & Defense ETF provides exposure to U.S. companies that manufacture commercial and military aircraft and other defense equipment by tracking the Dow Jones U.S. Select Aerospace & Defense Index. ITA has gained 9.5% over the past month and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.  

The Aerospace sector is the top contributor to third-quarter earnings and revenues with 55.1% and 9% growth, respectively. The earnings and revenue beat ratio of 90.9% and 72.7%, respectively, are also impressive.
 

Image Source: Zacks Investment Research

Consumer Discretionary: Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (PEZ - Free Report)

Invesco Dorsey Wright Consumer Cyclicals Momentum ETF tracks the DWA Consumer Cyclicals Technical Leaders Index and holds 38 stocks with positive relative strength (momentum) characteristics. PEZ has risen 20.6% in a month on robust earnings and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Total earnings for the 95.6% of the consumer discretionary sector’s total market capitalization are up 50.3% on 8.2% higher revenues, with 86.2% of the companies beating on earnings and 79.3% exceeding the top-line estimates. Notably, the sector is the second largest contributor to the S&P 500’s earnings growth.
 

Image Source: Zacks Investment Research

Technology: Invesco PHLX Semiconductor ETF (SOXQ - Free Report)

The tech sector has been the major sector whose results really stood out this earnings season, with third-quarter earnings on track to increase 20.8% from the same period last year on 4.2% higher revenues. The sector has had a profitability problem since the start of 2022, but it appears on track to resume its traditional growth attributes going forward, with double-digit earnings growth expected in each of the coming three periods.

Invesco PHLX Semiconductor ETF emerged as the biggest winner, gaining 16.9%. It offers exposure to the 30 largest U.S.-listed securities of companies engaged in the semiconductor business and tracks the PHLX Semiconductor Sector Index. SOXQ has a Zacks ETF Rank #1 (Strong Buy).
 

Image Source: Zacks Investment Research

Construction: iShares U.S. Home Construction ETF (ITB)

Total earnings from 100% of the sector’s total market capitalization are up 0.9% on 5.4% higher revenues, with 92.3% of the companies beating on earnings and 61.5% exceeding the top-line estimates. Notably, the earnings beat ratio is the third highest this earnings season.

iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. It has gained 21.1% in a month and has a Zacks ETF Rank #3 with a High risk outlook.

Image Source: Zacks Investment Research

Consumer Staples: AdvisorShares Restaurant ETF (EATZ - Free Report)

For the Retail sector, third-quarter earnings of 80.9% of the sector’s market capitalization in the S&P 500 index are up 38.5% from the same period last year on 8.3% higher revenues, with 87% beating EPS estimates and 78.3% beating revenue estimates. This is a notably better performance relative to other recent periods, both in terms of the growth rates as well as the
beats percentages.

AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and food service industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. The fund is up 13.8% over the past month on earnings strength coupled with solid Thanksgiving trends.

Image Source: Zacks Investment Research

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