ETF Preview: ETFs, Futures Point Higher as Tensions with North Korea Ease, Offsetting Downbeat Data From China

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

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): -7.3%

SPDR S&P 500 ( SPY ): +0.6%

iShares MSCI Emerging Index Fund ( EEM ): +1.1%

SPDR Select Sector Fund – Financial ( XLF ): +0.7%

ProShares Trust Ultra VIX Short Term Futures ETF ( UVXY ): -15%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were firmer. Actively traded PowerShares QQQ (QQQ) was up 0.7%.

U.S. stock futures were pointing to a higher open Monday as easing geopolitical pressures overshadowed downbeat economic data from China, and a down day in oil futures.

U.S. officials downplayed the imminent risk of a war on the Korean peninsula over the weekend, while China complied with a U.N. resolution by halting imports of coal, iron ore, lead and seafood from North Korea. These developments upstaged a miss on Chinese industrial production and retail sales, and profit-taking pressure on oil.

No major U.S. economic data is on tap Monday, but retail sales, key housing market data, and industrial production, along with the minutes of the latest Federal Open Market Committee meeting, will be released throughout the week.

Power Play: Health Care

Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were quiet in pre-market trading . Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.6%.

Lipocine (LPCN) shares were higher 11% in pre-market trade after the company said the U.S. Food and Drug Administration has acknowledged receipt of the new drug application resubmission for Tlando, a testosterone product candidate for replacement therapy in adult males with deficiency of endogenous testosterone, also known as hypogonadism. Liopcine said the FDA deemed the resubmission a complete response to its June 2016 complete response letter that requested additional information related to the dosing algorithm for the proposed label. The FDA has assigned a new Prescription Drug User Fee Act goal date of Feb. 8, 2018. Lipocine said the FDA’s acceptance of the resubmission brings one step closer an oral testosterone replacement treatment option to patients.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.7%. Direxion Daily Financial Bull 3X shares (FAS) was up 1.9% and its bearish counterpart, FAZ, was down 2.3%.

Whitestone REIT (WSR) said the Sugar Park Plaza in Houston, Texas has achieved 100% occupancy. The real estate investment trust said it expects revenues of approximately $200,000 as a result of its $650,000 redevelopment investment, resulting in a projected return on investment of approximately 30%.

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. SPDR S&P International Technology Sector ETF (IPK) was quiet.

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

Amazon.com (AMZN) was up 0.8% after a Reuters report that the company is exploring a technology that was first developed for the US military to produce prepared meals that don’t need refrigeration. Reuters’ report cited officials at the startup firm that is marketing the technology.

Energy

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

Lilis Energy (LLEX) was up 7.9% after it said initial production rates on its Delaware Basin wells are yielding results above expectations. “Our first three wells exceeded internal projections and we are confident that our fourth well, the Lion, is on track to repeat similar results,” said CEO Jim Linville. The company’s Delaware Basin production average rate of 1,916 net BOE/D in June 2017 increased to approximately 2,674 net BOE/D as of Aug. 7, the company said. The company also recently entered into a ten-year gas gathering, processing and purchase agreement with Lucid Energy Delaware to support Lilis’s drilling program in the Delaware Basin.

Commodities

Crude was down 0.6%. United States Oil Fund (USO) was down 0.6%. Natural gas was down 0.5% while United States Natural Gas Fund (UNG) was flat.

Gold was down 0.4%. SPDR Gold Trust (GLD) was down 0.7%. Silver was down 0.3% while iShares Silver Trust (SLV) was down 0.6%.

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) was down 0.3% while retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were flat.

Plaintiffs suing General Motors (GM) over faulty ignition switches and other alleged vehicle defects have reached a $1 billion settlement requiring the car maker to turn over that amount in stock, Reuters reported, citing remarks made by a lawyer for the plaintiffs at a court hearing. The report said General Motors’ lawyer Richard Godfrey criticized the agreement. He said the company had been given no say in the deal that was negotiated between the plaintiffs and a trust that was set up for creditors of “old GM,” which holds many liabilities that predate the car maker’s 2009 bankruptcy. The report cited GM as saying it will fight the settlement in court. GM shares were up 0.6%.


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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