Earnings season for the financial services sector kicks off in significant fashion Friday. For investors in exchange traded funds, such as the Financial Select Sector SPDR (NYSEArca: XLF), there is plenty to keep an eye on when it comes to fourth-quarter earnings updates.

XLF is coming off one of its best annual performances since the global financial crisis. While the financial services sector, the second-largest sector allocation in the S&P 500, has some doubters after last year’s impressive rally, some market observers believe the sector can keep tracking higher this year.

In addition to XLF, the largest financial services ETF, the SPDR S&P Bank ETF (NYSEArca: KBE) and SPDR S&P Regional Banking ETF (NYSEArca: KRE), among other exchange traded funds dedicated to bank stocks, have been soaring since early November.

“Fitch expects large U.S. banks’ 4Q16 results will be mixed. Large trading banks’ earnings likely benefited from election-related market volatility; however, overall loan growth likely remained muted during the quarter,” said Fitch Ratings in a recent note.

KBE, KRE and friends are benefiting from speculation that the Federal Reserve will boost interest rates multiple times this year. With a steepening yield curve or wider spread between short- and long-term Treasuries, banks could experience improved net interest margins or improved profitability as the firms borrow short and lend long.

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