As earnings season approaches, the financial sector could see a turning point, according to Wolfe Research. Technical analyst Rob Ginsberg believes that the Global X FinTech ETF (FINX) presents an attractive opportunity after a period of underperformance compared to the broader market.
With many of the big bank earnings already behind us, there are several fintech and financial service companies set to report their earnings in the coming weeks. The FINX ETF has been building a strong base over the past two years and is now at a critical point where it could potentially regain momentum.
Despite a sharp decline in late 2021, the FINX ETF has seen a total return of over 7% in the last three months and has shown signs of a rebound in 2024. While major banks have already reported their quarterly results, there are still potential catalysts for other financial companies, with four of the top five holdings in FINX yet to announce their earnings.
One of the top holdings in the FINX ETF is Paypal, which could be of particular interest to investors. Ginsberg also noted positive technical signals for the ETF, including an upward trend since October and strong trendline support. However, it’s important to be aware that earnings reports could have both positive and negative impacts on financial technology stocks and the FINX ETF. Additionally, investors should consider the fund’s expense ratio of 0.68% before making investment decisions.