How US Earnings Season Moves Your ASX ETFs

You check your portfolio on a Tuesday morning and notice your healthcare ETF is up 1.8%. Nothing obviously happened in Australia overnight. There was no RBA announcement, no ASX news. Yet the move is right there on your screen.

This is earnings season at work — and if you hold any ASX-listed ETF with US exposure, it’s happening to your portfolio four times a year whether you’re watching or not.

This week, as Microsoft, Meta, Apple, and Amazon all report Q2 2026 results between July 29 and July 30, the stakes are at their highest. Understanding the mechanical chain between a US company’s earnings call and your ETF unit price moving is not optional knowledge for Australian investors — it’s foundational.

What Is Earnings Season?

US-listed companies report their financial results quarterly. The four reporting windows each year follow a predictable calendar:

• Q1 (January–March results): April and May
• Q2 (April–June results): July and August
• Q3 (July–September results): October and November
• Q4 (October–December results): January and February

The July earnings season — the Q2 window — is the most watched of the year. It captures the first half of the calendar year in full. Technology companies typically dominate the headlines, and this year is no different: the week of July 27 alone brings Microsoft, Meta, Apple, and Amazon all to the reporting table within 48 hours.

But earnings season is not just about the Magnificent 7. Healthcare giants, industrials, financials, consumer staples — hundreds of companies across every sector of the S&P 500 report each quarter. And if your ETF tracks any of them, you have skin in the game.

The Earnings Chain: From Boardroom to Your ETF

Understanding why your ETF moves after earnings requires understanding the mechanical chain between a company’s results and your unit price. It works like this:

Step 1: The company reports results.
The company releases its quarterly financials — revenue, earnings per share (EPS), margins, and forward guidance. The result is measured against Wall Street consensus estimates. Beat the consensus and the stock usually rises. Miss it and the stock usually falls. Sometimes guidance matters more than the headline numbers.

Step 2: The stock price adjusts.
Within minutes — often seconds — of the earnings release, the stock price moves to reflect the new information. This happens either in after-hours trading (for results released after 4pm EDT) or in pre-market trading (for results released before 9:30am EDT).

Step 3: The ETF’s net asset value (NAV) adjusts.
The ETF you hold is a basket of stocks. Each stock in that basket has a weighting — a percentage of the fund it represents. When one of those stocks moves, the NAV of the entire fund moves proportionally. A fund with a 10% weighting in a stock that jumps 5% on earnings will see its NAV rise approximately 0.5% from that single company alone.

Step 4: The ASX unit price follows.
When the Australian market opens the next morning, the ETF’s unit price on ASX reflects the new NAV. Market makers — the entities responsible for keeping ETF prices aligned with their underlying assets — update the ASX price to match what happened overnight in New York.

The result: you wake up to a moved market, and the opportunity (or damage) is largely already done.

The Time Lag: Why You Always Wake Up to the Move

This is the most important concept for Australian investors to internalise, and the one that catches the most people off guard.

US markets trade between 9:30am and 4:00pm EDT. In Australian Eastern time (AEST), that translates to 11:30pm to 6:00am AEST (during US Eastern Daylight Time). Major tech companies typically release earnings after the US close — at approximately 4:00–4:30pm EDT — which is 6:00–6:30am AEST.

By the time most Australian investors wake up and check their phones, the US stock has already moved in after-hours trading. When the ASX opens at 10:00am AEST, the ETF unit price has fully incorporated the move.

For the large majority of Australian investors using standard brokers, there is effectively no window to act before the information is priced in. The lag is not your broker, not your app, not your connection speed. It is geography and time zones. The price has moved before your alarm goes off.

This has a direct implication for how you should think about earnings risk: the time to position — or to reduce position — is before the earnings release, not after.

JNJ as the Live Case Study

Let’s make this concrete with a real example from this earnings season.

Johnson & Johnson (JNJ) reported its Q2 2026 results on Tuesday, July 15, 2026 — this time released before the US market opened (a common alternative to after-hours releases). Here is what the market saw that morning:

• Revenue: USD 25.31 billion — up 6.6% year-on-year, beating consensus by approximately USD 250 million
• Adjusted EPS: USD 2.90 — beating the consensus estimate of approximately USD 2.84–2.85
• Full-year 2026 guidance raised to USD 101.1 billion at the midpoint (up from prior guidance)

A beat on both top and bottom lines, with guidance raised. In earnings season terms, this is the clean sweep. JNJ’s stock responded accordingly.

Now here is the chain for an Australian investor holding IXJ (the iShares Global Healthcare ETF, ASX-listed):

1. JNJ reports strong Q2 2026 results at approximately 6:30am–7:00am AEST on July 15
2. JNJ stock moves pre-market in New York in response
3. IXJ’s underlying US index adjusts to reflect JNJ’s higher valuation — JNJ represents approximately 6.9% of the IXJ portfolio
4. When the ASX opens on the morning of July 15, the IXJ unit price on ASX reflects the updated NAV, incorporating JNJ’s move

If you hold IXJ and you had never looked up its holdings, you likely had no idea that a Johnson & Johnson earnings release would move your fund. But it did — and now you know exactly why.

The same logic applies to VHT (Vanguard’s US-listed Healthcare ETF, accessible to Australians via international brokers), where JNJ carries an even larger weighting of approximately 8.9%. In a fund concentrated enough that its second-largest holding is approaching 9% of the entire portfolio, a single company’s earnings call materially moves your investment.

Why Healthcare ETFs Are Especially Exposed

Healthcare is a sector where large, stable companies dominate the index weighting. JNJ, Eli Lilly, AbbVie, UnitedHealth, and Merck together represent the overwhelming majority of both IXJ and VHT. This concentration means that when even one of these giants reports, the entire fund moves.

Broad global ETFs like VGS (Vanguard MSCI International Shares, ASX-listed) or IVV (iShares S&P 500, ASX-listed) are more diversified — JNJ’s weight in a broad market fund is naturally smaller. But NDQ (BetaShares NASDAQ 100, ASX-listed) carries heavy concentration in the big technology names, which means its earnings exposure this week — with Microsoft, Meta, Apple, and Amazon all reporting — is enormous.

Note that some ASX healthcare ETFs (such as BetaShares DRUG) are currency-hedged. These remove the AUD/USD layer discussed below, so the unit price movement more closely tracks the underlying USD performance of the stocks.

The AUD/USD Amplifier

There is a second force acting on your ASX ETF during earnings season that most Australians overlook entirely: the AUD/USD exchange rate.

ASX-listed ETFs with US exposure are priced in Australian dollars. The underlying assets — US stocks — are priced in US dollars. The conversion between the two happens continuously, and during earnings season, it matters more than usual.

Here is the mechanism: when major US companies report strong earnings, the broader US market often rises. A rising US market typically signals risk-on sentiment, which can push the AUD higher against the USD (the Australian dollar tends to behave as a risk-correlated currency). When AUD rises against USD, it partially offsets the gain your ETF captures from the underlying US stocks.

The arithmetic is straightforward:

• JNJ stock rises 3% in USD terms
• AUD/USD rises 1% (AUD strengthens) over the same period
• Your IXJ unit price on ASX rises approximately 2% in AUD terms — not 3%

The reverse is also true, and it cuts the other way. In a risk-off environment — say, several major companies miss earnings expectations — US markets may fall, and the AUD may also weaken as investors flee to the USD. In this scenario, your ETF’s NAV falls in USD terms, but the weaker AUD cushions some of the blow in AUD terms.

As of late July 2026, AUD/USD is trading around 0.70 — having touched a high of 0.7024 in the preceding week. This is a meaningful level: a 70-cent AUD has been a psychological threshold for Australian investors for years. With a significant portion of the Magnificent 7 reporting this week, any broad market movement will be accompanied by AUD/USD volatility that either amplifies or dampens the move in your ASX ETF.

This is not a reason to hedge or to trade currencies. It is simply information you should carry. The number on your ASX ETF screen is already denominated in AUD. The FX conversion is baked in. But understanding why your ETF moved slightly differently than the underlying US index is the kind of literacy that separates informed investors from confused ones.

What Investors Actually Get Wrong

The three most common mistakes Australian investors make during earnings season:

Mistake 1: Selling (or buying) after the move is already in the price
The market is brutally efficient. By the time you read about the earnings result on a news site or see it on your phone, the price has already adjusted. Selling a healthcare ETF after a strong JNJ result because “now might be a good time to take profits” is not a strategy — the price already reflects that result. You are not acting on new information. You are reacting to old information at a price that has already moved.

Mistake 2: Not understanding why your ETF moved when you do not own that stock directly
This is the most common confusion. “I do not own JNJ — why did my ETF go up?” The answer is now clear: you own a basket. JNJ is in the basket. When JNJ moves, so does your fund — in proportion to its weighting. This is not a bug. It is the entire design of an index fund. But you cannot be surprised by it if you do not know what is in your basket.

Mistake 3: Confusing guidance with results
Earnings reports have two components: the historical result (what actually happened last quarter) and forward guidance (what the company expects going forward). Markets often care more about guidance than results. A company can beat its Q2 numbers and still see its stock fall if guidance for Q3 is weaker than expected. This is counterintuitive to new investors, and it is a regular source of confusion during earnings season. JNJ’s strong Q2 2026 result was accompanied by raised full-year guidance — which is precisely why the market responded positively to both the number and the outlook.

Practical Takeaways

1. Know your ETF’s top 10 holdings.
   Every ETF publishes its full holdings list on its provider website. For IXJ (ASX), visit BlackRock’s Australian product page. For NDQ, visit BetaShares. Spend five minutes before each earnings season understanding where your concentration risk sits. You do not need to monitor every stock — just know the heavy weights.
2. Track US earnings in AEST, not EDT.
   When you see an earnings date listed as “July 29 EDT,” translate it to AEST. Results released after the US close (4pm EDT / 6am AEST) will be fully priced in when ASX opens at 10am. Set expectations accordingly: you will not be acting before the move.
3. The highest concentration risk this week is in tech-heavy ETFs.
   With Microsoft and Meta reporting on July 29 and Apple and Amazon on July 30, NDQ holders are in for a high-volatility week. NDQ tracks the NASDAQ 100 and holds significant weightings in all four. Healthcare ETF holders have already navigated the JNJ print — but if you hold IVV or VGS, the broad market exposure to these four names will still move your fund.
4. Use earnings season as a portfolio literacy exercise, not a trading trigger.
   The investors who do well through earnings season are not the ones trading on results. They are the ones who already understood what they owned going in — and who hold the conviction to sit through short-term volatility because they understand why it happened.
5. Do not ignore the FX component.
   A rising AUD is a headwind for unhedged US ETFs. A falling AUD is a tailwind. During earnings season, both the stock and the currency can move simultaneously. Your real return in AUD terms accounts for both. Currency-hedged ETFs remove this layer entirely.

Data Sources:

• Johnson & Johnson Q2 2026 Results press release, 15 July 2026 (jnj.com / investor.jnj.com)
• BlackRock Australia iShares Global Healthcare ETF (ASX: IXJ) product page and holdings data
• Vanguard Health Care ETF (VHT) holdings (as of mid-July 2026)
• Company investor relations pages and earnings calendars (Microsoft, Meta, Apple, Amazon) confirming July 29–30 2026 reporting dates
• Mid-market AUD/USD data (late July 2026 levels around 0.70; recent high 0.7024)

Wall St. Down Under | Australia

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Disclaimer: Wall St. Down Under is an independent financial newsletter for informational and educational purposes only. Nothing published here constitutes financial advice, a recommendation to buy or sell any security, or a solicitation of any investment decision. Always do your own research and consult a licensed financial adviser before making investment decisions. Australian investors should consider their own financial situation, objectives, and risk tolerance. Past performance is not indicative of future results.