While energy companies are expected to be the largest contributor to earnings decline for the S&P 500 in the third quarter, the stabilizing crude oil prices and potential production cutbacks from major oil producers could help support sector-related exchange traded funds.
The Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, will be under the spotlight over the next two days as ConocoPhillips (NYSE: COP) reports third quarter results before the bell Thursday and Chevron (NYSE: CVX) and Exxon Mobil (NYSE: XOM) report Friday before the open. XLE includes a 2.8% tilt toward COP, 17.5% XOM and 14.0% CVX.
The energy sector has been this year’s best performing area of the market, with XLE rising 17.8% year-to-date on rebounding crude oil prices.
Analysts polled by FactSet anticipate ConocoPhillips will reveal adjusted quarterly loss of 66 cents per share, compared to the adjusted loss of 38 cents per share in the year-ago period, MarketWatch reports. Observers will be watching for any word of further dividend cuts.
The markets expects Chevron to see adjusted earnings of 39 cents per share, compared to $1.25 per share a year go. Market watchers will want to hear details on Chevron’s plan for its two large projects, including Wheatstone an Gorgon, in Australia.
Observers project Exxon will report adjusted earnings of 59 cents per share, compared to $1.01 per share in the third quarter of 2015. Investors will see if the integrated oil producer turned over a new leaf after an underwhelming second quarter.