Investors have shifted their focus toward the second-quarter earnings season, with some of the major banks expected to report results next week. Some of the key sectors expected to contribute to second-quarter earnings growth are energy, aerospace, finance, technology, construction and industrial products.

Better-than-expected earnings performances should lead to a rally in the price of stocks from these sectors. This is why we should keep an eye on mutual funds from sectors that are likely to make the most of the second-quarter earnings season.

Prospects for Q2 Earnings Upbeat

According to estimates, total second-quarter earnings for the S&P 500 index are expected to be up +5.7% from the same period last year on +4.6% higher revenues. If we move beyond Q2, total earnings for the S&P 500 cohort are anticipated to increase 6.3% on 4.5% higher revenues in Q3 and gain 9.8% on 5.3% higher revenues in Q4.

For the entire year, total earnings for the index are expected to be up 7.4% on 4.2% higher revenues. This will be way more than 1.1% earnings growth on 2.1% higher revenues recorded last year. Earnings for the S&P 500 index are expected to be up 11.3% in 2018 and 9.2% in 2019.

Who Could be the Major Winners of Q2?

From the 16 major S&P 500 sectors, earnings are expected to be upbeat for 10. Out of the major contributors to the overall earnings growth in the second quarter, earnings for the energy sector are expected to increase 250%. Although negative sentiments stemmed from the decline in oil prices during the May-June period, strong earnings growth should be a breather for investors. The energy sector is expected to earn $9.4 billion this quarter, up from a gain of $2.7 billion the year-earlier period.

Some other key sectors projected to witness double-digit earnings growth in the second quarter are aerospace (48.8%), construction (15.7%) and industrial products (11.8%). Encouraging ISM Manufacturing data released last month is expected to have a positive impact on construction and industrial sectors.