With a number of major banks and brokers reporting earnings, the investing world will get an objective glimpse at exactly how all of the overseas turmoil has affected bottom line returns for some of the biggest financial firms in the world. Yesterday investors watched Citigroup announce an 11% dip in quarterly profit, sparking a massive sell-off for the already beat down the stock. On the flip side, Wells Fargo was able to report a 20% jump in profits and was in the black for the duration of the trading day [see also Iran Tensions And Crude Oil: What It Means For Your Portfolio].
Today will see another bellwether financial institution report its most recent fiscal quarterly earnings, Goldman Sachs (GS). Goldman is home to over 34,000 employees and is stationed in New York City. The company is something of a jack of all trades but its primary business operations come from investment banking and securities. Goldman has been in the headlines over the last few years for all of the wrong reasons, as the company has experienced a significant backlash since the market crash in 2008. Today, the firm hopes to follow in Wells Fargo’s footsteps and surprise the street, or else it may face a harsh sell-off [see also Financials Free ETFdb Portfolio Now Available].
Analysts are calling for an EPS of $1.24 with revenues around $6.5 billion. It should be noted that the company has missed their last two reports, with a miss of 425% last quarter. Like many other financial institutions, even if GS is able to hit its marks, its revenues for the year will still be down a considerable amount, which could have an adverse effects on even the most upbeat announcement. But judging from Wells Fargo, whose positive announcement still meant a dip in revenue from the previous year, if Goldman can manage to meet or beat the street, the stock could be in for a nice session [see also The 10 Most Actively Traded ETFs In The World].
In light of this major earnings announcement, today’s ETF to watch will be the Dow Jones U.S. Broker-Dealers Index Fund (IAI). This fund, which measures the performance of the investment services sector of the U.S. equity market, has $55 million in total assets and has gained over 4.6% on the year. Goldman accounts for the top slot in this ETF, taking home an allocation of 7.7%, giving it a fair amount of say over IAI’s performance. If GS is able to surprise, look for IAI to have a nice trading day, but a big miss from this financial behemoth will likely send IAI into the gutter [see also Ten ETFs No One Is Thankful For].
Disclosure: No positions at time of writing.