Lara Crigger, editor-in-chief at VettaFi, recently appeared on TD Ameritrade to discuss earnings to look for this week with FAANG companies reporting as well as the looming Fed meeting with host Nicole Petallides.
The major FAANG companies report this week with Microsoft (MSFT) and Alphabet (GOOGL) reporting on Tuesday, Meta (META) on Wednesday, and Amazon (AMZN) and Apple (AAPL) both report earnings on Thursday. The Federal Reserve meeting with expectations of another 0.75% interest rate increase is also upcoming.
“I think a lot of investors are going to be watching the earnings week for clues on where companies are going from here, including the big FAANG stocks,” Crigger explained. “This all matters from an ETF perspective because FAANGs are almost ubiquitous building blocks in ETF portfolios.”
These stocks are included across a range of ETFs, not just within tech but also in ESG, thematic, and growth ETFs and as they are likely to be in most portfolios, it’s an earnings week for advisors and investors to pay attention to.
The Technology Select Sector SPDR Fund (XLK ) is an ETF to keep an eye on as Apple and Microsoft make up nearly half of the fund and it is heavily impacted by FAANG earnings. The fund is down nearly 20% year-to-date but has rebounded about 9% in the last month. Crigger sees an opportunity and an attractive entry point for any investor that might be looking to capture any gain potential within the space.
The Vanguard Communication Services ETF (VOX ) is another potential area of opportunity and while it carries a 12% weight to Alphabet, it offers broader diversification than XLK across market caps. The fund is down 26% year-to-date but has rebounded nearly 7% in the last month.
“This is another fund where the valuations have hit a more reasonable level and that could look more attractive for investors in the moment,” Crigger said.
Discussion pivoted to the recent launch of the leverage and inverse single stock ETFs, particularly the AXS TSLA Bear Daily ETF (TSLQ ) which has seen a healthy amount of flows ($100 million) in its first week since launch. These types of derivative products have been an interest point for advisors on the VettaFi platforms, Crigger explained.
“These funds, these single stock leveraged ETFs like TSLQ, they have the potential to be a trader’s dream. They’re perfect for moments like this, expressing earnings seasons expectations or taking advantage of big market shocks,” said Crigger.
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