Although uncertainty in Trump’s proposed infrastructure plan is weighing on bullish sentiments on the materials sector, it has managed to come up with a remarkable performance this year. This is especially true as rebounding commodity prices, positive developments in China, pick-up in global manufacturing activities and improving global trends are acting as catalysts to the sector

As a result, Materials Select Sector SPDR (XLB – Free Report) , Vanguard Materials ETF (VAW – Free Report) ,iShares U.S. Basic Materials ETF (IYM – Free Report) , and Fidelity MSCI Materials Index ETF (FMAT – Free Report) have gained about 13% so far this year. Will this trend continue as the Q2 earnings season unfolds?

Let’s delve into the earnings picture of some of the largest companies in the materials space that would drive the performance of these funds in the coming weeks as these dominate their portfolio. These include Dow Chemical (DOW – Free Report) , DuPont (DD – Free Report) , Praxair (PX – Free Report) , Air Products & Chemicals (APD – Free Report) and LyondellBasell Industries (LYB – Free Report) . These stocks collectively account for 39.8% share in IYM, 39.5% in XLB, 29.1% in FMAT and 29% in VAW.

According to the our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP increases our chances of predicting an earnings beat, while a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Inside Our Surprise Prediction of These Stocks

Dow Chemical has a Zacks Rank #4 and an Earnings ESP of -1.98%. The company has seen negative earnings estimate revision of eight cents over the past 90 days for the to-be-reported quarter but delivered a positive earnings surprise of 10.77% on average over the last four quarters. Additionally, the stock has an unimpressive VGM Style Score of D. Dow Chemical is scheduled to report earnings on July 27 before the opening bell