Need-to-Know ETFs For Apple Earnings
Reality check: It's Apple's (Nasdaq:
) market, other stocks are just living in it. The largest U.S.
company by market value reports fiscal second-quarter earnings
today after the close and analysts are expecting a profit of
$10.06 a share on revenue of $36.81 billion.
It has been said this is an NBA market, Nothing But Apple, and
given that the stock has fallen 4.6% in the past month, the
broader market's near-term fate could hinge on Apple's ability to
once again knock the cover off the ball. That's what the iPad
maker did in its fiscal first quarter when it earned $13.87 a
share on revenue of $46.3 billion when analysts expected $10.08
per share on sales of $38.85 billion.
A miss and subsequent pullback would, of course, be damaging
plenty of ETFs
as the stock's recent slide has proven. On the other hand,
excessive weighting in select ETFs
is a good thing when the stock is going up.
With that double-edged sword in mind, these are the ETFs
traders will want to consider ahead of and after Apple's earnings
iShares Dow Jones U.S. Technology Sector Index Fund
The iShares Dow Jones U.S. Technology Sector Index Fund is home
to the largest Apple allocation in the ETF universe with a 21.48%
weight to the iPhone maker as of Monday's close. That weight is
down from 21.93% on April 4, the result of Apple's slide that has
led to a lower market cap.
Let's put into context how important Apple is IYW's fate: One
would have to add up the ETF's sixth through tenth largest
holdings - Intel (Nasdaq:
), Oracle (Nasdaq:
), Cisco (Nasdaq:
), Qualcomm (Nasdaq:
), EMC (NYSE:
) and Hewlett-Packard (NYSE:
) - to exceed the weight given to Apple.
PowerShares QQQ (Nasdaq:
Apple's weight in QQQ has fallen to 18.06% as of Monday from
19.1% earlier this month, but that barely diminishes Apple's
importance in the Nasdaq 100 tracking ETF. As Street One
Financial President Scott Freeze told Benzinga in early April,
QQQ would only have a single-digit gain this year and would be
flat over the past year if not for Apple. Apple's weight in QQQ
is nearly double that of the ETF's second-largest holding,
Go bearish or hedge with the ProShares UltraPro Short QQQ
Technology Select Sector SPDR (NYSE:
As is the case with QQQ, XLK's flaw, that being an excessive
Apple allocation, gets exposed when the stock isn't in permanent
rally mode. Remember what we just said about QQQ? "QQQ would only
have a single-digit gain this year and would be flat over the
past year if not for Apple." The same goes for XLK.
XLK now features an 18.55% weight to Apple. The ETF's
unheralded rival, the FocusShares Morningstar Technology Index
) is another one to keep an eye because its Apple weight is
iShares PHLX SOX Semiconductor Sector Fund (Nasdaq:
The reason SOXX makes this list is simple. Look at
. Then look at
. Clearly, SOX could be in danger if Apple disappoints. Go
bearish or hedge with the Direxion Daily Semiconductor Bear 3X
For more on Apple and ETFs, please click
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