Well, this shouldn’t help with the populist anger: embattled Goldman Sachs (NYSE: GS) reported earnings of $3.3 billion in the first quarter. But exchange traded funds (ETFs) are finding reasons to gain as energy prices rise and stronger earnings results come in.
Goldman’s first-quarter earnings nearly doubled to $3.3 billion last quarter, surging ahead of the rest of the financial industry. The good news comes at a dicey time for the big bank as it faces down fraud charges. Goldman intends to defend itself vigorously against the charges and said they would never intentionally mislead anyone. iShares Dow Jones U.S. Broker-Dealers (NYSEArca: IAI) is up slightly this morning by 0.4%; Goldman Sachs is 10.4%. [ETFs to Watch as Goldman Plays Out.]
Oil prices have snapped a two-day losing streak, gaining on the back of strong corporate earnings. The per-barrel price is now around $84. Although prices are down about 1% in the last week, they’re still up more than 60% from a year earlier. United States Oil Fund (NYSEArca: USO) is up 1% this morning. [ETFs to Hedge Rising Oil and Gas Prices.]
All that spending could catch up with us sooner or later. The International Monetary Fund (IMF) stated today that the single biggest threat to the global economy is not the big Wall Street banks; instead, it’s the rising level of government debt. With that, the IMF slashed its estimate for asset writedowns by 19%. Governments need medium-term plans to reduce their deficits or risk trouble. The “ring of fire” economies are the United States, Italy, France, Greece, Japan and the United Kingdom. iShares MSCI EMU (NYSEArca: EZU) is up 0.8% so far today, but it’s down 3.7% year-to-date. [Europe and the U.S.: A Tale of Two ETF Industries.]
The standards this earnings season are high. IBM (NYSE: IBM) reported a 13% rise in profit in the first quarter and raised its outlook for the year, but that wasn’t enough for investors, who were left disappointed by a drop in service-contract signings. Technology Select Sector SPDR (NYSEArca: XLK) is up 0.5% this morning; IBM is 7.4%. [Listen to Our Latest Podcast for Earnings Season Ideas.]
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.