This earnings season could prove to be a breakout point for a part of the financial sector that is often overshadowed by the titans of Wall Street, according to Wolfe Research. Technical analyst Rob Ginsberg said in a note to clients Wednesday that the Global X FinTech ETF (FINX) looks attractive after a long period of underperforming the broader market. “Now that we’re past much of the big bank earnings, there are a number of fintech and financial service names on the docket this week and next. From a broader lens, the groups are set up well to reaccelerate. The FINX, Fintech ETF, has carved out a nice base over the past two years and is at an important juncture if it wishes to keep that setup intact,” Ginsberg wrote in a note to clients. The fund, which has more than $300 million in assets, has not recovered from a sharp slide that began in late 2021, but it does have a total return of more than 7% over the past three months. FINX 5Y mountain The FINX ETF has shown early signs of a rebound in 2024. While most of the biggest banks have already released quarterly results this month, other financial companies still have that potential catalyst coming up. Four of the top five holdings in FINX have yet to announce their earnings for the current cycle, for example. Top-holding PayPal could be of particular interest. Ginsberg wrote that the ETF has some positive technical signals of its own. “We like the uptrend off the October low. Trendline support has continued to hold up,” Ginsberg said. To be sure, earnings reports could prove to be a downside catalyst for financial technology stocks and the fund. The ETF also comes with a hefty expense ratio of 0.68%. — CNBC’s Michael Bloom contributed reporting.
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