XLFETF

The First Trust Financials AlphaDEX ETF (FXO) is a passively managed fund providing broad exposure to the Financials sector with $1.04 billion in assets. It has a 0.6% expense ratio and 2.24% dividend yield, with performance of 5.24% year-to-date and 13.36% over the past year. The ETF carries a Zacks Rank of 3 (Hold) and is considered a medium-risk option with 106 holdings.

State Street reported strong Q3 2026 earnings with 33% year-over-year growth in per-share earnings to $3.69 and 13% revenue growth to $4 billion. The company is expanding wealth management services for registered investment advisors, growing alternative asset servicing at double-digit rates, and benefiting from net interest margin expansion. With assets under custody reaching a record $59.2 trillion, management expects over 500 basis points of positive operating leverage in 2026.

Wall Street rallied on Thursday with all three major indexes closing in the green, driven by a rotation into defensive sectors like healthcare, materials, and financials. Investors shifted away from debt-sensitive AI and technology stocks as Treasury yields fell. The Dow Jones jumped 1.1%, the S&P 500 added 0.3%, and the Nasdaq gained 0.1%, while economic data showed mixed signals with jobless claims rising slightly and PPI inflation at 1.3%.

State Street reported Q3 2026 revenue of $4 billion (13% YoY growth) and EPS of $3.69 versus $2.78 a year ago. Revenue slightly missed consensus estimates by 0.9%, while EPS beat by 1.1%.

Key metrics showed mixed results with some beating estimates (Net Interest Income, Tier 1 Leverage Ratio) while others fell short (AUM, Management Fees, Foreign Exchange Trading Services). The stock has underperformed the S&P 500 by 8.1% over the past month and carries a Zacks Rank #3 (Hold) rating.

The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100 index, excludes all financial companies and any stocks not primarily listed on Nasdaq. This means major banks like JPMorgan Chase and Wells Fargo, as well as NYSE-listed companies like Berkshire Hathaway, Visa, and Oracle, are absent from the fund. Despite missing the entire financial sector (11.5% of the S&P 500), QQQ has delivered superior long-term returns of 21% annually over 10 years compared to 13% for financial sector funds, though it underperformed in certain years like 2022 and 2024.

State Street reported Q3 2026 earnings of $3.69 per share, beating estimates of $3.65, with net income up 28.4% year-over-year. However, shares fell 9% pre-market due to net inflows plummeting to $7B from $114B, revenues missing estimates at $4B, and management raising 2026 expense growth guidance to 8-8.5%. The company did achieve record AUM of $6.31T and AUC/A of $59.17T.

State Street Corporation beat Q3 2026 EPS estimates with $3.69 vs. $3.65 consensus, though revenues slightly missed expectations. The stock has gained 35% YTD, outpacing the S&P 500's 14% gain. However, the company received a Zacks Rank #3 (Hold) rating due to mixed estimate revisions, and its industry (Banks - Major Regional) ranks in the bottom 31% of sectors.

State Street is expected to report Q3 2026 earnings on October 14 with a projected 31.3% earnings jump and 14% revenue growth year-over-year. NII is anticipated to rise 19.8% while fee revenues are expected to climb 12.9%, driven by higher asset balances and favorable market performance.

However, increased technology and expansion costs may offset some gains. The company's Earnings ESP of 0.00% and Zacks Rank #3 suggest uncertain earnings beat prospects.

Wall Street's largest banks face Q3 earnings season with investor expectations running low, as banking stocks have underperformed the broader market. While earnings are expected to grow 20% year-over-year, concerns about higher Treasury yields, weakened dealmaking, and subdued lending growth loom. Most major banks show negative or near-flat Earnings Surprise Predictions, with analysts suggesting investors consider diversified financial ETFs to mitigate company-specific risks.

The article compares two investment-grade corporate bond ETFs: iShares' LQD and State Street's SPLB. SPLB offers lower fees (0.04% vs 0.14%) and higher yields (6.0% vs 4.9%), but carries higher volatility and greater downside risk due to its long-duration focus.

LQD provides broader maturity exposure, lower volatility, and better long-term returns despite higher costs. For most long-term investors, LQD is recommended as the more dependable choice, while SPLB suits those betting on falling interest rates.

The article explains how expense ratios significantly impact ETF returns over time, even when differences seem small. A 0.40% fee difference can result in tens of thousands of dollars in lost gains over 30 years. The piece highlights five lowest-cost ETFs across different investment categories, emphasizing that passive ETFs maintain lower costs by tracking indexes rather than relying on active management.

BlackRock is set to report Q3 2026 earnings on October 14 with expected EPS growth of 21.6% year-over-year and AUM projected to jump 16.4% driven by market appreciation and healthy inflows. However, the company faces headwinds from rising expenses and declining investment advisory performance fees. The Earnings ESP of -0.45% and Zacks Rank #3 suggest low probability of beating consensus estimates.

BNY Mellon and State Street Corporation are both positioned as likely earnings beat candidates for Q3 2026. BNY is expected to report EPS of $2.27 (up 18.9% YoY) with an Earnings ESP of +0.33% and Zacks Rank #3, while State Street is projected to post EPS of $3.64 (up 30.9% YoY) with an Earnings ESP of +0.58% and Zacks Rank #3. Both companies have strong historical track records of beating consensus estimates.

State Street Corporation is expected to report Q3 2026 earnings of $3.64 per share, representing a 30.9% year-over-year increase, with revenues projected at $4.04 billion (up 14%). The company has a positive Earnings ESP of +0.58% combined with a Zacks Rank #3 (Hold), suggesting it is likely to beat consensus estimates. State Street has beaten EPS estimates in all four of the last quarters, with the most recent quarter delivering a +10.61% surprise.

State Street Corporation (STT), a Boston-based finance company, is highlighted as a strong dividend play with a current yield of 2.11% and annualized dividend of $3.68, up 17.9% year-over-year. The company has increased dividends 4 times over the last 5 years with an average annual increase of 9.16%. With a low payout ratio of 27% and expected earnings growth of 33.69% for 2026, STT presents a compelling opportunity for income investors, though it carries a Zacks Rank of #3 (Hold).

U.S. stock markets ended Thursday's volatile session in positive territory as Treasury yields retreated from 24-year highs, boosting investor sentiment. The Dow, Nasdaq, and S&P 500 all gained modestly.

Micron Technology reported exceptional fourth-quarter earnings with non-GAAP EPS surging 11-fold year-over-year, driven by strong AI demand and tight memory conditions. Economic data showed manufacturing activity remained in expansion territory while jobless claims fell below expectations.

SEI Investments is expanding into Singapore to establish a direct foothold in Asia-Pacific's asset-management hub. The company reported 14% year-over-year revenue growth in H1 2026, driven by alternatives, platform conversions, and client activity. While the Singapore expansion offers growth potential, success will depend on steady client wins in a competitive market dominated by larger players like State Street and BNY Mellon.

Recent economic data shows PCE inflation came in softer than expected while Q2 GDP exceeded expectations. All market attention is now focused on the upcoming Friday employment report, which will be a key indicator for economic health and potential Federal Reserve policy decisions.

T. Rowe Price offers a strong 4.93% dividend yield with 40 consecutive years of increases, but the stock has underperformed peers with only 5% annualized returns over 10 years. However, reinvesting dividends significantly improves returns to approximately 9% over 10 years and 7.5% over 20 years, making it competitive with other asset managers.