2. Materials
Materials is another sector that may be hit this week by poor earnings, but from a different headwind. Emerging market exposure and commodity prices have continued to drag on the sector which is expected to be reflected when they report. Reports have pinned profit drops of 16% on average for major players in the industry.
iShares Global Materials ETF (NYSEarca: MXI), Materials Select Sector SPDR (NYSEarca: XLB), and Vanguard’s Materials ETF (NYSEarca: VAW) are all along major players who could be hit. A look at VAW’s chart shows the earnings come in the middle of an extended rally which has pushed it above its 50MA.
3. Industrials
Industrials, the final sector who is expected to dip on earnings this week, is the one least hit but sharing the same troubles as materials. A pullback of 3% is expected due to the emerging market and commodity price concerns.
ETFs that track the sector broadly include the Industrial Select Sector SPDR (NYSEarca: XLI), Vanguard’s Industrials ETF (VIS), and iShares U.S. Industrials ETF (NYSEarca: IYJ).
IYJ’s profile actually shows promising trends as it recently crossed its 200MA. With the pullback expected to be more muted in Industrials there seems to actually be buy signals for investors interested in exposure to the sector as its broader picture has been positive.
