EarningsBeats Digest

Published: Mon, 06/07/21

EarningsBeats.com Digest for June 7, 2021

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Join Tom Bowley for a briefing on market activity on Mondays and Wednesdays from 9-9:30 am EST before the opening bell. Click here to listen live or visit our YouTube page later today to view the recorded session.

It's Webinar Day!

We hope that you'll join us for today's event:

Preparing For Shocking Inflationary Data

Today, Monday June 7th, 2021 at 4:30pm eastern

EarningsBeats.com's Chief Market Strategist Tom Bowley has been warning about spiking headline inflation data for the past few months. It's not likely to get any better when the May CPI and PPI reports are released on June 10th and June 15th, respectively. Tom will discuss how stock market pros are prepping for a potentially volatile period ahead. Should you be making any changes to your portfolio? Get that answer and much, much more at this VERY timely event!

This is a FREE event available to all members of our community. Room instructions will be emailed to you prior to the start of the webinar and it will be recorded for those who are unable to attend the live event.

Understanding an ETF and its Components

If you ever want to see what's making an ETF (Exchange-Traded Fund) outperform or underperform, you simply need to review the charts of its component stocks. If it's a widely-diversified ETF, that's difficult to do as you'll need to review dozens and dozens of stocks, possibly even hundreds. But for more highly-concentrated ETFs, it's much simpler to review what's driving the ETF by using an RRG (relative rotation graph) chart. For instance, one ETF that I follow daily is the iShares Russell 1000 Growth ETF (IWF). 45% of its holdings are invested in just 9 stocks. Here are those 9 stocks on an RRG chart:

Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) represent more than 27% of the entire ETF, so the IWF isn't going to really get moving until these 3 stocks perform better. AAPL and AMZN are "improving" vs. the benchmark S&P 500, but they remain on the left side of center, which means they remain relative laggards. There's maybe a little bit of good news, however, as they are moving up above the center horizontal line, which is indicative of improving momentum. I often compare the IWF to the IWD, which represents value-oriented stocks and is much more diversified.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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