By Paul MacDonald
The earnings season is off to a compelling start, with US banks once again leading the charge. At Harvest ETFs, we’ve seen the significance of this sector firsthand through our Harvest US Bank Leaders Income ETF (HUBL:TSX). Today, four of our key holdings—Wells Fargo, Citigroup, JPMorgan, and Goldman Sachs—reported strong earnings, collectively representing approximately 27% of the fund.
Highlights Driving Optimism
- Resilient Margins: Despite higher yields, net interest margins remain robust, particularly for JPMorgan, which announced upward revisions, further validating the strength of the US market recovery.
- Regulatory Sentiment Shift: Names like Wells Fargo are benefiting from improving regulatory sentiment and expanding margins.
- Trading Strength: Goldman Sachs reported solid trading results, demonstrating resilience across diverse revenue streams.
- Capital Returns: Citigroup unveiled an impressive $20 billion buyback program, reinforcing shareholder confidence.
Earnings breadth validated again with US Banks earnings
Source: Bloomberg, January 10, 2025.
Market Leadership Beyond Big Tech
The narrative around market earnings breadth is being validated once again. US banks are not just participating—they’re outperforming. Since June last year, the US banking sector has outpaced the tech sector by nearly 20%, showcasing its potential to drive diversified portfolio growth.
Beyond HUBL: A Broader Focus on US Banks
While US banks are a cornerstone of HUBL, their importance extends to our other offerings:
- Harvest Diversified Monthly Income ETF (HDIF): We’ve maintained a strategic overweight position in US banks, complemented by increasing allocations to industrials.
Why It’s Not Too Late to Join the Rally
Inflation data moderation or tariff reductions could further temper yields, enhancing the sector’s earnings potential. For investors seeking exposure to resilient growth and strong income potential, US banks remain a compelling opportunity.
Stay ahead of the curve by exploring the strength and resilience of US banks with HUBL and HDIF. Learn more about these ETFs and how they can complement your investment strategy at harvestportfolios.com