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The Dow Jones Industrial Average Index has been performing well so far this year, buoyed by strong corporate profits, enthusiasm around AI and hopes that the Fed will cut rates. However, the blue-chip index is underperforming the other large-cap indices, such as S&P 500 and Nasdaq Composite Index. SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report) , which tracks the Dow Jones Industrial Average Index, has gained 3.7% so far this year.
The first-quarter 2024 earnings season will kick off this week, with the banking sector slated to report numbers. There has been a deceleration in the earnings outlook in recent months, with negative revisions for several key sectors since the start of the first quarter.
Total S&P 500 earnings are expected to be up 2.2% from the same period last year on 3.4% higher revenues, per the latest Earnings Trends. This would follow 6.8% earnings growth in the fourth quarter on 3.9% higher revenues. Though estimates have steadily come down since the quarter began, the magnitude of cuts compared favorably with the recent periods. In fact, estimates have come down for 10 of the 16 Zacks sectors (read: 5 Favorite Sector ETFs of Q1 Earnings).
Of the 16 Zacks sectors, eight are expected to post earnings growth in the first quarter, with the strongest gains in the Technology sector (19.4%). This would be followed by Retail (13.5%), Consumer Discretionary (11.2%), Utilities (5.8%) and Construction (4.2%).
DIA in Focus
SPDR Dow Jones Industrial Average ETF Trust is one of the largest and most popular ETFs in the large-cap space, with an AUM of $33.2 billion and an average daily volume of 3.4 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, with a slight tilt toward the top firms. Financials (22.7%), information technology (19.8%), healthcare (16.9%), consumer discretionary (15.3%) and industrials (14.3%) are the top five sectors.
SPDR Dow Jones Industrial Average ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk.
Nearly one-fourth of the blue-chip firms are expected to announce results this week and the next. JPMorgan Chase JPM and Goldman GS are expected to report on Apr 12 and Apr 15, respectively. Both UnitedHealth UNH and Johnson & Johnson JNJ will announce earnings on Apr 16, while International Business Machines IBM will report on Apr 17. Dow Inc. DOW and Intel INTC are expected to release earnings on Apr 25.
Let’s delve deeper into the probable first-quarter earnings picture that will likely aid the fund in the coming days.
JPMorgan has an Earnings ESP of -0.21% and a Zacks Rank #3. The stock has seen a negative earnings estimate revision of a penny over the past seven days for the to-be-reported quarter. Analysts decreasing estimates right before earnings — with the most up-to-date information — is not a good indicator for the stock. JPM delivered an earnings surprise of 14.67%, on average, in the last four quarters (read: Should You Buy Bank ETFs Before Earnings Releases?).
Goldman has an Earnings ESP of +2.24% and a Zacks Rank #3. The stock has witnessed positive earnings estimate revision of 6 cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information — is a good indicator for the stock. GS’ earnings surprise track over the preceding four quarters is also not good, with the average surprise being 15.88%.
UnitedHealth has an Earnings ESP of -1.80% and a Zacks Rank #3. The stock has witnessed positive earnings estimate revision of 6 cents over the past seven days for the to-be-reported quarter. It delivered an earnings surprise of 2.67%, on average, over the last four quarters.
Johnson & Johnson has an Earnings ESP of +0.60% and a Zacks Rank #3. The stock saw a negative earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. JNJ’s earnings surprise track record over the preceding four quarters is robust, the average being 5.12% (read: Building Healthy ETF Portfolios: 6 Key Nutrients).
International Business Machines has an Earnings ESP of 0.00% and a Zacks Rank #2. The stock saw no earnings estimate revision in the past 30 days for the to-be-reported quarter. IBM delivered an earnings surprise of 5.56%, on average, in the last four quarters.
Dow has an Earnings ESP of +3.22% and a Zacks Rank #3. The stock has seen a positive earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. DOW came up with a beat in each of the last four quarters, the average being 20.76%.
Intel has an Earnings ESP of 0.00% and a Zacks Rank #3. The stock has witnessed no earnings estimate revision over the past 30 days for the to-be-reported quarter and delivered an earnings surprise of 154.49%, on average, over the last four quarters.
Bottom Line
With some of the blue-chip companies having reasonable chances of coming up with an earnings surprise, investors should closely monitor the movement of the Dow ETF and grab any opportunity that arises from a surge in any of the 30 stocks.
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What's in Store for Dow ETFs in Q1 Earnings?
The Dow Jones Industrial Average Index has been performing well so far this year, buoyed by strong corporate profits, enthusiasm around AI and hopes that the Fed will cut rates. However, the blue-chip index is underperforming the other large-cap indices, such as S&P 500 and Nasdaq Composite Index. SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report) , which tracks the Dow Jones Industrial Average Index, has gained 3.7% so far this year.
The first-quarter 2024 earnings season will kick off this week, with the banking sector slated to report numbers. There has been a deceleration in the earnings outlook in recent months, with negative revisions for several key sectors since the start of the first quarter.
Total S&P 500 earnings are expected to be up 2.2% from the same period last year on 3.4% higher revenues, per the latest Earnings Trends. This would follow 6.8% earnings growth in the fourth quarter on 3.9% higher revenues. Though estimates have steadily come down since the quarter began, the magnitude of cuts compared favorably with the recent periods. In fact, estimates have come down for 10 of the 16 Zacks sectors (read: 5 Favorite Sector ETFs of Q1 Earnings).
Of the 16 Zacks sectors, eight are expected to post earnings growth in the first quarter, with the strongest gains in the Technology sector (19.4%). This would be followed by Retail (13.5%), Consumer Discretionary (11.2%), Utilities (5.8%) and Construction (4.2%).
DIA in Focus
SPDR Dow Jones Industrial Average ETF Trust is one of the largest and most popular ETFs in the large-cap space, with an AUM of $33.2 billion and an average daily volume of 3.4 million shares. Holding 30 blue-chip stocks, the fund is widely spread across components, with a slight tilt toward the top firms. Financials (22.7%), information technology (19.8%), healthcare (16.9%), consumer discretionary (15.3%) and industrials (14.3%) are the top five sectors.
SPDR Dow Jones Industrial Average ETF charges 16 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk.
Nearly one-fourth of the blue-chip firms are expected to announce results this week and the next. JPMorgan Chase JPM and Goldman GS are expected to report on Apr 12 and Apr 15, respectively. Both UnitedHealth UNH and Johnson & Johnson JNJ will announce earnings on Apr 16, while International Business Machines IBM will report on Apr 17. Dow Inc. DOW and Intel INTC are expected to release earnings on Apr 25.
Let’s delve deeper into the probable first-quarter earnings picture that will likely aid the fund in the coming days.
Earnings Whispers
According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
JPMorgan has an Earnings ESP of -0.21% and a Zacks Rank #3. The stock has seen a negative earnings estimate revision of a penny over the past seven days for the to-be-reported quarter. Analysts decreasing estimates right before earnings — with the most up-to-date information — is not a good indicator for the stock. JPM delivered an earnings surprise of 14.67%, on average, in the last four quarters (read: Should You Buy Bank ETFs Before Earnings Releases?).
Goldman has an Earnings ESP of +2.24% and a Zacks Rank #3. The stock has witnessed positive earnings estimate revision of 6 cents over the past seven days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information — is a good indicator for the stock. GS’ earnings surprise track over the preceding four quarters is also not good, with the average surprise being 15.88%.
UnitedHealth has an Earnings ESP of -1.80% and a Zacks Rank #3. The stock has witnessed positive earnings estimate revision of 6 cents over the past seven days for the to-be-reported quarter. It delivered an earnings surprise of 2.67%, on average, over the last four quarters.
Johnson & Johnson has an Earnings ESP of +0.60% and a Zacks Rank #3. The stock saw a negative earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. JNJ’s earnings surprise track record over the preceding four quarters is robust, the average being 5.12% (read: Building Healthy ETF Portfolios: 6 Key Nutrients).
International Business Machines has an Earnings ESP of 0.00% and a Zacks Rank #2. The stock saw no earnings estimate revision in the past 30 days for the to-be-reported quarter. IBM delivered an earnings surprise of 5.56%, on average, in the last four quarters.
Dow has an Earnings ESP of +3.22% and a Zacks Rank #3. The stock has seen a positive earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. DOW came up with a beat in each of the last four quarters, the average being 20.76%.
Intel has an Earnings ESP of 0.00% and a Zacks Rank #3. The stock has witnessed no earnings estimate revision over the past 30 days for the to-be-reported quarter and delivered an earnings surprise of 154.49%, on average, over the last four quarters.
Bottom Line
With some of the blue-chip companies having reasonable chances of coming up with an earnings surprise, investors should closely monitor the movement of the Dow ETF and grab any opportunity that arises from a surge in any of the 30 stocks.