ETF Preview: ETFs, Futures Higher as Wall Street Mulls Economic Data; FOMC in Focus as Policy Meeting Kicks Off

Active broad-market exchange-traded funds in Tuesday’s pre-market session:

VanEck Vectors Gold Miners ETF ( GDX ): -0.04%

SPDR Select Sector Fund – Financial ( XLF ): +0.2%

SPDR S&P 500 ( SPY ): +0.1%

iShares MSCI Emerging Index Fund ( EEM ): +0.1%

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.1%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were inching higher. Actively traded PowerShares QQQ ( QQQ ) was up 0.1%.

U.S. stock futures were higher as the Federal Reserve starts its two-day meeting among policy makers. The Federal Open Market Committee is expected to announce the start of the reduction of the Fed’s $4.5 trillion portfolio of government securities. Interest rates are expected to remain steady.

In the meantime, Wall Street digested the latest slew of economic data. The U.S. current-account deficit rose 8.5% in Q2 to $123.1 billion, mostly attributable to lower secondary income. The deficit in Q1, meanwhile, was revised down to $113.5 billion from $116.8 billion.

The Department of Labor reported that the cost of imported goods increased 0.6% in August – the first monthly rise since April of this year. Excluding fuel, import prices rose a much smaller 0.3%. The price index for U.S. exports also advanced 0.6% during the month.

Housing starts in August 0.8% to an annual rate of 1.18 million from an upwardly revised 1.19 million in July. Building permits, on the other hand, jumped 5.7% to a 1.3 million rate.

Power Play: Health Care

Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were flat in pre-market trading . Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.2%.

Supernus Pharmaceuticals (SUPN) fell more than 10% after the company said late Monday that, after a planned interim analysis from the first phase III clinical trial on SPN-810 for kids aged 6 to 12 years with ADHD, both trials will continue through to completion but it will eliminate the lower dose of 18 mg in the tests. Moving forward, all patients will be randomized to either the 36 mg dose arm or placebo until the predetermined total number of patients are enrolled without changing the size of the trials. It said it believes this will maximize the probability of reaching a statistically significant outcome for the 36 mg dose. Implementation of these changes will start immediately. It said it continues to expect enrollment through mid-2018. Current enrollment is at approximately 64% for the first trial and 56% for the second trial. Enrollment in the open label extension study continues to be very encouraging at a high level of 90%, it said.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.1%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.5% while its bearish counterpart, FAZ, was inactive.

Camden Property Trust (CPT) said late Monday that it expects to incur approximately $2 million to $2.5 million in cleanup and repair expenses in Q3 as a result of Hurricane Irma. The company said it will provide an update to its FY earnings guidance together with its Q3 earnings release scheduled for late October.

Technology

Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW), iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were also inactive.

Alibaba Group Holding (BABA) intends to invest roughly $100 million in Best Inc.’s initial public offering, Bloomberg reported citing people with knowledge of the matter. The move comes after the size of the deal was cut nearly in half, with the company seeking as much as $495 million from the IPO after lowering its price range for the offer, the people were cited as saying. The company is now selling 45 million ADRs at $10 to $11 apiece. ADRs were up 0.2%.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) was up 0.3%.

Yingli Green Energy (YGE) reported that it swung to a Q2 adjusted loss of RMB17.8 per American depository share ($2.6) from a profit of RMB5.9 per ADS in the year-ago quarter. Revenues rose to RMB3.17 billion ($468.1 million) from RMB2.52 billion a year earlier, which beat a single estimate of $415 million provided by Capital IQ. For FY17, the company now expects photovoltaic module shipments of 2.5 gigawatts to 2.8 gigawatts, up from a prior view for 2.1 GW to 2.2 GW. Q3 PV module shipments are forecast at 550 megawatts to 600 megawatts.

Commodities

Crude was down 0.4%. United States Oil Fund (USO) was up 0.7%. Natural gas was down 3.1% while United States Natural Gas Fund (UNG) was up 0.3%.

Gold was down 0.8%. SPDR Gold Trust (GLD) was flat. Silver was down 1.5% while iShares Silver Trust (SLV) was down 0.5%.

Consumer

Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were inactive.

Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were flat.

Walgreens Boots Alliance (WBA) said it has received regulatory clearance to purchase 1,932 stores, three distribution centers, and related inventory from Rite Aid Corporation (RAD) for $4.38 billion in cash and other consideration. The amended and restated purchase agreement between the parties updates the terms of the agreement with Rite Aid announced in June, which included 2,186 stores and related assets for $5.18 billion in cash and other consideration. The company said the transaction has been approved by the boards of Rite Aid and Walgreens Boots Alliance and is still subject to other customary closing conditions. Store purchases are expected to begin in October, with completion expected in spring 2018. Walgreens added that due to the expected timing of store purchases under the amended and restated asset purchase agreement, it does not expect the transaction to have a significant impact to its adjusted diluted net earnings per share in its fiscal year ending Aug. 31, 2018. RAD shares were down 8.4%.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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