AI-Summary – News For Tomorrow
The upcoming Q3 earnings season is expected to be positive, with improved forecasts indicating 8% earnings growth for the S&P 500. AI is driving growth in the technology and utilities sectors, with increased power consumption and infrastructure investments. The Utilities Sector ETF is trending higher but may experience a pullback. Financial stocks are also expected to perform well, with a forecasted 11.5% growth driven by high interest rates and consumer strength. Companies like Berkshire Hathaway and JPMorgan are positioned to benefit from AI applications.
News summary provided by Gemini AI.
The onset of Q3 earnings season is just around the corner, and it looks like it will be a good one. Not only is there an outlook for S&P 500 NYSEARCA: SPY earnings growth and sequential acceleration to follow, but the forecasts are also improving, providing a lift for market spirits.
As of early October, the consensus for the year is for earnings to grow by 8.0%, an 80-basis-point improvement from the lows of the revision cycle, and the forecast for the following year is also improving.Â
The AI Trade Continues to Gain Momentum
Technology Select Sector SPDR Fund Today
Technology Select Sector SPDR Fund
As of 04:10 PM Eastern
- 52-Week Range
- $172.45
â–¼
$289.50
- Dividend Yield
- 0.53%
- Assets Under Management
- $92.26 billion
Utilities: AI Is Electrifying GrowthÂ
Utilities Select Sector SPDR Fund Today
Utilities Select Sector SPDR Fund
As of 04:10 PM Eastern
- 52-Week Range
- $71.02
â–¼
$90.57
- Dividend Yield
- 2.55%
- Assets Under Management
- $21.77 billion
AI companies are increasing their power consumption daily, driving global electricity demand. At the same time, EV demand is growing, and utilities are investing in modernization and infrastructure to support it. The key takeaway is that the rate base is growing for this sector while rates are increasing, providing a lever for growth.Â
The Utilities Sector ETF is also trending higher, having reached new highs in early October. The move is likely to continue, driven by earnings strength and capital returns; however, investors should remain cautious. Technical conditions, including a diverging MACD and an overbought stochastic, suggest that this market could pull back at any time.
Dual Tailwinds for Financial Stocks
Financial Select Sector SPDR Fund Today
Financial Select Sector SPDR Fund
As of 04:10 PM Eastern
- 52-Week Range
- $42.21
â–¼
$54.49
- Dividend Yield
- 1.36%
- Assets Under Management
- $53.77 billion
The Financial Sector NYSEARCA: XLF is forecasted to have grown by 11.5% in Q3, driven by lingering NII strength tied to higher interest rates and consumer resiliency. The forecasts for this sector are also rising, with the consensus up by 400 basis points from its low at the start of the period.Â
The leading stocks in this group include Berkshire Hathaway NYSE: BRK.A and JPMorgan NYSE: JPM, which are well-suited to benefit from the application of AI. On the one hand, Berkshire is a massive insurance company that utilizes AI analysis and automation throughout its network. On the other hand, JPMorgan is the world’s largest financial institution outside of China, and it is planning to become the first fully AI-assisted bank globally.Â
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