Those superlatives do not change the potentially rocky earnings road XLF and its rivals face this week. On Tuesday, Citigroup (NYSE: C) and Charles Schwab (NYSE: SCHW) report earnings. No big deal, right? Those stocks combine for just 7% of XLF’s weight. That is just the beginning of XLF’s earnings avalanche. [Citigroup Earnings Lift Bank ETFs]

On Wednesday, seven XLF components that combine for 16.6% of the ETF’s weight step into the earnings confessional. That group includes American Express (NYSE: AXP), Bank of America (NYSE: BAC) and BlackRock (NYSE: BLK).

New Dow component Goldman Sachs (NYSE: GS), among other XLF constituents report Thursday, and XLF will not see a casual a Friday when Morgan Stanley and (NYSE: MS) and SunTrust (NYSE: STI) take their earnings turns.

Worrisome is that as of Friday, 91 companies had issued negative guidance compared with just 19 issuing positive guidance, according to FactSet.  Financial services at 33% have the second-lowest percentage of companies reporting earnings above estimates of any sector, FactSet said. Good news may come in the form of financials having the lowest forward 12-month P/E at 12.

XLF’s P/E is 13.41 with a price-to-book ratio of 1.26. The ETF may have already been pricing in some bad news. Over the past 90 days, XLF is up just 0.4% while the iShares Global Financials ETF (NYSEArca: IXG), which allocates 61% of its weight to non-U.S. companies, is up 6.7%.

Financial Select Sector SPDR

Tom Lydon’s clients own shares of American Express.

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