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ETF Preview: ETFs, Futures Higher as Wall Street Cautiously Optimistic on Progress in US-China Trade Talks


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Active broad-market exchange-traded funds ahead of Friday's regular session:

iShares MSCI Emerging Index Fund ( EEM ): +0.6%

iShares China Large-Cap ETF ( FXI ): -0.5%

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

iShares Inc iShares MSCI Brazil ETF ( EWZ ): +1.1%

VanEck Vectors Gold Miners ETF ( GDX ): +0.06%

Broad Market Indicators

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

US stock futures were pointing to a positive open, with the S&P 500 hovering near record highs. Investors are cautiously optimistic with the developments of the trade talks between the US and China and are awaiting developments as the two countries return to the negotiating table, with a meeting schedule for the end of the month.

In economic data news August retail sales rose 0.1% -- the weakest sales in the last six months -- compared with expectations for an increase of 0.4%. Ex-autos, retail sales increased 0.3% versus forecasts for an increase of 0.5%.

August import prices declined 0.6% -- the biggest drop in more than 2 years; excluding oil, import prices fell 0.1%.

August industrial production rose 0.4%, as expected, while August capacity utilization climbed to 78.1%, though missed expectations for a climb to 78.3%.

Consumer sentiment for September and business inventories for July will both be released at 10 am ET.

Power Play: Consumer

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

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 inactive in pre-market trade.

Sears Holdings (SHLD) rose more than 13% after it said late Thursday it plans to cut $100 million more in costs out of its networks to streamline its operations, as losses widened in the 13-week period. Net loss widened to $4.68 per share in Q2 from $2.33 per share a year earlier, as revenue fell to $3.18 billion from $4.28 billion over the same period. No analyst estimates were available for the struggling retailer. Sears, which has said last month that it would close down 46 unprofitable stores to streamline its operations, said it continues to evaluate its network of stores, which is a critical component to our integrated retail transformation, and will make further adjustments as needed. It expects these initiatives to result in annualized cost savings of about $100 million, in addition to the company's $200 million of annualized cost savings initiative announced earlier this year that it has exceeded.

Winners and Losers

Financial

The Select Financial Sector SPDRs (XLF) was inactive. Direxion Daily Financial Bull 3X shares (FAS) and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) were also quiet in pre-market trading .

Genworth Financial (GNW) rose more than 1% after it said the company and China Oceanwide Holdings are submitting supplemental information to regulators reviewing their proposed merger. The companies previously said they had extended their merger agreement to Dec. 1 to provide additional time for regulatory review. The supplemental filings outline a potential alternative funding structure Oceanwide may implement if political and economic developments cause delays in financing. The filings also reference the companies' post-closing capital investment plan and provide additional details about an enhanced data security program. Under the capital investment plan, Oceanwide will contribute $1.5 billion to Genworth between the time of close and March 2020. The contribution will be used to improve Genworth's financial stability, which could include retiring debt due in 2020 and 2021 or enabling future growth.

Technology

Technology Select Sector SPDR ETF (XLK) was up 0.2% and other tech funds 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 inactive.

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

IBM (IBM) rose marginally after it said late Thursday that it has received a 10-year services contract from Aditya Birla Fashion and Retail (ABFRL), a fashion and lifestyle company in India. Under the deal, IBM will provide services to help enhance and manage ABFRL's IT infrastructure.

Energy

Dow Jones US Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both flat n the pre-market session.

Devon Energy (DVN) rose some 0.5% after it said it has repurchased about 50 million shares at a total cost of $2 billion, averaging $41 per share, under its $4 billion-share-buyback authorization that expires at the end of 2019. According to the independent energy company, it is now on track to complete the $4 billion buyback of almost 20% of its outstanding shares in early 2019, with further repurchases worth $500 million slated to be completed before its Q3 earnings call.

Commodities

Crude was up 0.04%. United States Oil Fund (USO) was down 0.1%. Natural gas was down 0.1% while United States Natural Gas Fund (UNG) was inactive.

Gold was up 0.01%. SPDR Gold Trust (GLD) was up 0.1%. Silver was down 0.2%, while iShares Silver Trust (SLV) was up 0.1%.

Health Care

Health Care SPDR (XLV) and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were inactive. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 1.1%.

IRIDEX (IRIX) fell more than 16% after it said that it has priced its underwritten public offering of 1,666,667 shares of its common stock at a price to the public of $6.00 per share. In addition, the company has granted the underwriters a 30-day option to purchase up to 250,000 additional shares of its common stock in the public offering. The offering is expected to close on Sept. 18, subject to customary closing conditions. Gross proceeds to the company from the offering are expected to be $10,000,000 before deducting the underwriting discount and other offering expenses payable by the company and excluding any exercise of the underwriters' option.

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

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , ETFs
Referenced Symbols: EEM , FXI , SPY , EWZ , GDX



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