ETFdb Logo
ETFdb Logo
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. What to Watch in Q3 Earnings Season
News
Share

What to Watch in Q3 Earnings Season

Stoyan BojinovOct 13, 2015
2015-10-13

Forget the Fed, tune out China, and tune in your radios to corporate conference calls – its earnings season!

Earnings season is upon us once again and investors will have their eyes on a number of recurring themes, as well as some new ones, in light of the recent equity market turbulence matched with lackluster global growth expectations.

Q3 Earnings Season Themes

For earnings-related matters we’re happy to reference an authority in the space, FactSet, and specifically their most recent insights.

To set the tone for the season, Q3 2015 earnings growth is estimated to come in at negative 5.1% compared to negative 1.0%, which was the forecast at the start of the quarter (June 30). Now, to put this into historical perspective, consider the fact that the last time the S&P 500 saw a decline in both bottom-up EPS estimates and its value for two straight quarters was back in 2011.

Company Talking Points

Before we get too hung up on estimates, let’s recap some of the biggest themes that are likely to come up in company conference calls this quarter:

  • A persistently strong U.S. dollar relative to both the euro and yen continues to hurt overseas sales.
  • The long-term ripple effect of lower oil and gas prices has yet to be felt in other sectors, and companies will likely continue to reiterate that they are flexible.

Earnings Revisions

Traders and investors alike may also find it useful to keep these other developing trends, highlighted below, in mind as they look for opportunities in the coming weeks:

  • Since the start of Q3, the materials sector has seen the largest downward revision in growth estimates, from negative 1.5% to negative 13.7%; in the same period, the only sector to have seen an improvement in earnings estimates has been telecom services, from 16.1% to 17.8%.
  • The consumer discretionary sector is expected to report the second-highest earnings growth rate this season at 10.3%, led by the auto manufacturer and Internet retail industries, which are expected to post blistering earnings growth of 51% and 41%, respectively.
  • Energy is expected to report declines of 64.5% in earnings year-over-year; to put this sharp decrease into perspective, if this sector were excluded, then the aggregate estimated earnings growth for the S&P 500 Index would go from negative 5.1% to positive 2.3%. Within the sector, oil and gas refining and marketing, and oil and gas storage and transportation (think MLPs) are the only sub-industries expected to post positive earnings growth this quarter, at 22% and 7%, respectively.

Content continues below advertisement

Many Ways to Play

There’s a plethora of ways to execute, and supplement, your investment ideas during earnings seasons. For starters, use the ETF Trading Cheat Sheet to quickly and easily find the tickers for the sectors and industries that you may want to trade.

Be a Contrarian

If you want to trade against the herd, consider the sector breadth readings below compiled by Bespoke:

sector breadth levels

As you can see, the health care sector offers the most “beaten down” opportunities by far, whereas the utilities sector might present some ripe short-sell setups.

Amplify Your Bets

ETFs make it easy to add leverage to your strategy without the need for borrowing on margin. Use the ETFdb Screener to find leveraged ETFs that target the assets you wish to trade; be sure to read about the risks and nuances associated with these products.

See also: Should You Use Leveraged ETFs Over the Long Haul?

Expand Your Options

For more seasoned investors, the use of options can greatly expand the range of strategies available at your disposal. For starters, consider using a bull call spread or a bear put spread for making a leveraged directional bet with clearly defined downside.

The Bottom Line

There’s a plethora of ways to take advantage of the multitude of ETFs out there, and especially so during earnings season. Just be sure to take precautions like utilizing limit orders and stop-losses when executing any sort of ETF trade.

Follow me @SBojinov

Image courtesy of zdiviv at FreeDigitalPhotos.net

» Popular Pages

  • Tickers
  • Articles

May 17

Uranium Investing Has Legs

May 17

Why Managed Futures Are the Crisis Alpha Creators

May 17

Exchange Reflections with Dave Nadig

May 17

ETF Prime: Dave Nadig on Ethics of Indexing

May 17

Invest in Infrastructure With This One ETF

May 17

MICUS: Bitcoin Is “Best Store of Value Earth Has Seen”

May 17

Simplify Helps Asset Allocation with FIG Launch

May 17

Teucrium Launches Diversified Agro ETF With TILL

May 17

Convertible Bond Drubbing May be Worth it With This ETF

May 17

Tech Bargains Means Now's a Good Time to Mind QQQ's

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

ARKK

ARK Innovation ETF

VYM

Vanguard High Dividend Yield...

WEAT

Teucrium Wheat Fund

VTI

Vanguard Total Stock Market...

VGT

Vanguard Information...

XLE

Energy Select Sector SPDR...

VIG

Vanguard Dividend...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • About Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X