To The Moon

🌟🌟🌟On Friday April 11, Big Banks will kick off the earnings season with their Q1 25 financial reports.  All eyes will be on JPMorgan, Morgan Stanley, Wells Fargo and BlackRock as they report their quarterly results.  $Financial Select Sector SPDR Fund(XLF)$ offers exposure to these financial institutions as well as Warren Buffett's Berkshire Hathaway, Visa Inc, Mastercard, Bank of America and much more. 

The Global markets have been in a turmoil following Donald Trump's punitive tariffs last Thursday.  XLF was down 11% in the past 6 days and has dropped 8.5% year todate.  However XLF is still up 5.6% in 2024.

Thr expectations are that the banks will do well in the first 3 months of 2025.  However the banks will be closely watched to see if they will cut their financial performance benchmarks for the rest of the year.  Up until late February, Bank stocks had been up for the year, after chalking up double digit percentage gains in 2024.

$Berkshire Hathaway(BRK.B)$  is the Top holding of XLF with a weightage of 14%.  Since last year, Warren Buffett has been selling stocks, which resulted in a record cash pile of USD 344 billion.  In hindsight this is a smart move as Berkshire Hathaway is less affected by the current market volatility. 

$JPMorgan Chase(JPM)$  is the largest bank in the US and one of the largest in the world with a market capitalisation of USD 599.6 billion.  According to FactSet consensus analyst estimate, JP Morgan's adjusted profit is expected to be USD 4.64 per share, up from USD 4.44 per share compared to previous year quarter.  Analysts expect JPMorgan to generate 1st quarter revenue of USD 43.91 billion, up from USD 41.93 billion a year ago. 

$Visa(V)$  is a global payment technology company that facilitates electronic funds transfers, primarily through Visa branded credit, debit and prepaid cards, connecting consumers, businesses, banks and governments for digital payments in more than 200 countries, enabling them to use digital currency instead of cash and cheques. 

Visa reported an excellent Q1 2025 earnings results with 10% net revenue growth, 8% GAAP EPS growth and 14% non GAAP EPS growth.  GAAP net income for the quarter was USD 5.1 billion or USD 2.58 per share, an increase of 5% and 8% respectively compared to previous year's results. 

Visa is scheduled to report its Q2 25 earnings in April 29.  Investors will be keen to find how Trump's tariffs have affected consumer spending. 

The Top 10 holdings of XLF take up 55% weightage.  Total number of holdings is 75.  The expense ratio is 0.09%, among the lowest compared to competing ETFs.  

XLF pays dividends every 3 months.  It goes ex dividend on June 23 2025.  The current dividend yield is 1.5%.

Wall Street Analysts are bullish on XLF with a Buy rating, Average Target price of USD 56.10, an upside potential of 27%.  With the current market sell off, XLF has lots of exponential growth ahead. 

I have invested in XLF as I like its low cost entry point compared to individual stocks.  It does the heavy lifting for me in selecting the best performing financial stocks.  XLF is also the largest ETF under this sector with Assets Under Management of USD 49.77 billion. 

The US financial sector is vital to the economy as it provides the infrastructure for capital growth, enabling businesses to invest, grow and create jobs and for individuals to save and invest for the future. 

The US financial sector also plays a key role in global financial stability as the US Dollar is the world's reserve currency and the US capital markets are the largest in the world.

With $Financial Select Sector SPDR Fund(XLF)$ I have the pulse of the US economy in just 1 trade - Maximum power at Minimum cost! 

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