ETF Winners & Losers From Earnings Season

The Q2 2016 earnings season is just about to end with 94.8% companies of the S&P 500 having come up with their results. Earnings from the S&P 500 so far have decreased 3.3% this season with the beat ratio being 71.7%. Revenues nudged up 0.1% and has a beat ratio of 53.8% as noted by the August 18 issue of the Earnings Trends.

Estimates for the current period (for Q3 of 2016) are being cut with negativity taking an upper hand lately from expectations of flat earnings at the start of the quarter. Energy weakness is very much there on the scorecard as on an ex-energy basis, earnings grew 0.3% on 2.5% on revenue growth.

Whatever the case, investors must be interested in finding out which sectors and their related ETFs are leading or lagging in the Q2 earnings season. To do so, we have analyzed the sector ETF performance for the last one month to zero in on the top ETF winners and losers from the season. Below we profile those products.

Winners

PureFunds ISE Junior Silver ETF (SILJ - ETF report) – Up 17.3%

Silver prices soared lately on a precious metal rally. While safe-haven demand has boosted the metal amid global growth issues, a pickup in manufacturing activity in the U.S. and hints of stabilization in the Chinese economy also acted as tailwinds for silver.

Notably, silver has high usage in industrial activity with about 50% of total demand coming from industrial applications. No wonder, silver mining ETFs have cashed in on this trend. The Zacks Industry Rank of the silver mining sector is in the top 5%, at the time of writing.

SPDR S&P Technology Hardware ETF XTH – Up 11%

This earnings season fared well for the tech space with tech-heavy Nasdaq 100 ETF (QQQ - ETF report) gaining about 3.4% in the last one month (as of August 19, 2016) compared with 0.7% gains recorded by the S&P 500-based SPY. Notably, technology is one of two sectors with the highest proportion of positive surprises, as per the Earnings Trends issued on August 18.

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