A week after highlighting the strength of the stock market seasonality for the month of October, Freedom Capital Markets Chief Market Strategist Jay Woods has a warning for one sector this month. Jay Woods on Financials The financial sector jumps out to Woods right now, and not in a good way.
"The one chart that scares me right now… Financials," Woods said in a weekly newsletter. The market expert highlights the SPDR Financial Select Sector ETF (NYSE:XLF), which has recently broken its uptrend and failed to hold a key support area.
The ETF is also in danger of going even lower ahead of earnings season, Woods warned. "Financials are often viewed as the market’s heartbeat.
The sector accounts for roughly 12% of the S&P 500. " Woods said a strong financial sector can show confidence for economic growth and help support bull markets.
The market expert said looking at the near-term on the ETF chart shows the price trying to recapture the 200-day moving average and being oversold. "History says financials don’t have to lead as we’ve experienced technology-led advances in 2020 and 2023.
" Read Also: EXCLUSIVE: Market Expert Jay Woods Picks Top 2 Magnificent Seven Stocks For Rest of 2026, 2027 What’s Next for Financials The financial sector kicks off the next earnings season next week, with several of the major financial companies reporting quarterly results in the first few days of the week. Here are some of the top earnings reports for financials at the start of next week: JPMorgan Chase (NYSE:JPM): Oct.
13 Citigroup (NYSE:C): Oct. 13 Wells Fargo (NYSE:WFC): Oct.
13 Goldman Sachs (NYSE:GS): Oct. 13 Bank of America Corporation (NYSE:BAC): Oct.
14 Those financial results could make the financial sector volatile and could also signal whether the sector will push forward with gains or see shares drop further. 4% over the last 52 weeks.
