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ETF Preview: U.S. Markets Point to Another Lower Open; Tech, Cyclicals Fall Hard Again


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

SPDR S&P 500 ( SPY ): -1.12%

Barclays PLC ( VXX ): +3.24%

Invesco QQQ Trust ( QQQ ): -1.40%

SPDR Select Sector Fund - Financial ( XLF ): -0.96%

iShares MSCI Emerging Index Fund ( EEM ): -1.32%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were roughly 1% lower. Actively traded PowerShares QQQ ( QQQ ) was down 1.4%.

U.S. stock futures were lower ahead of Thursday's opening bell following a large drop for the major averages on Wednesday, which saw the Dow Jones Industrial Average fall over 800 points and the Nasdaq lose 4.1%, representing its worst decline since June 2016, when the UK voted for Brexit. The Asian markets also fell hard overnight, including a 5.2% drop for Shanghai Composite Index while the Hang Seng index fell over 3.5%. European markets also are lower Thursday morning but are trading above their initial lows. Defensive-oriented U.S. sectors were falling in pre-market trading but are outperforming more cyclical sectors like technology and consumer discretionary stocks, which took the brunt of Wednesday's declines.

In economic data:

The U.S. Bureau of Labor Statistics reports its consumer price index for September at 8:30 a.m. ET, with the market consensus expecting no change from the 0.2% rise reported for August when a decline in medical and clothing costs kept a lid on the month-over-month increase. Excluding food and energy expenses, prices also are seen rising 0.2% in September, doubling the 0.1% advance reported in the prior month. The year-over-year rise for the core rate for September is projected at 2.4% and 2.3% ex food and energy compared with 2.7% and 2.2%, respectively, in August.

The Labor Department this morning also releases first-time applications for jobless benefits for the seven days ended Oct. 6, with the consensus view expecting initial claims to remain near their five-decade lows at 207,000, unchanged from the previous week's total and also matching the moving average for four weeks ended Sept. 22.

In news abroad:

Former Brexit Secretary David Davis criticized Prime Minister Theresa May, predicting in a television interview late Wednesday that her exit proposal for separating Great Britain from the European Union won't pass parliament because it contains "no guarantees" for steering the country's economic relationship with its former EU partners in the future.

Power Play: Health Care

Health care fund Health Care SPDR (XLV) was declining while the Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were flat. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down over 1.1%.

CRISPR Therapeutics AG (CRSP) was soaring in Thursday's premarket, rising over 10%, after the U.S. Food and Drug Administration late Wednesday lifted the clinical hold on testing of the company's CTX001 investigational treatment of sickle cell disease the agency ordered in May. The company said it remains on track to begin a phase I/II trial of CTX001 with sickle cell patients before the end of the year and is currently enrolling patients with transfusion-dependent thalassemia in Europe for a separate phase I/II study. Drug development partner Vertex Pharmaceuticals (VRTX) was lower in early trading.

Winners and Losers

Direxion Daily Financial Bear 3X ETF (FAZ) +2.93%

Consumer Staples Select Sector SPDR ETF (XLP) -0.30%

Health Care Select Sector SPDR ETF (XLV) -0.89%

Financial Select Sector SPDR ETF ( XLF ) -1.06%

iShares Nasdaq Biotechnology ETF (IBB) -1.13%

Technology Select Sector SPDR ETF (XLK) -1.41%

Energy Select Sector SPDR ETF (XLE) -1.55%

Direxion Daily Financial Bull 3X ETF (FAS) -2.27%

Consumer Discret Sel Sect SPDR ETF (XLY) -3.37%

Financial

Select Financial Sector SPDRs ( XLF ) was down 1.06%. Direxion Daily Financial Bull 3X shares (FAS) was down 2.27% and its bearish counterpart, FAZ was up 2.93%.

Investar Holding (ISTR) was steady ahead of Thursday's opening bell after the bank holding company late Wednesday announced its $19.9 million acquisition of Texas-chartered Mainland Bank. Under terms of the proposed transaction, investors will receive 3.0389 Investar shares for each Midland share they now own, valuing the target company at about $79.22 per share and providing Midland shareholders with about 7.4% of the combined banks. Investar is expecting the deal will boost its FY19 per-share earnings by about 3% over current projections and dilute its tangible book value by about 1% at closing.

Technology

Tech funds Technology Select Sector SPDR ETF (XLK) was falling over 1.4% while the 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 quiet in pre-market trading. SPDR S&P International Technology Sector ETF (IPK) also was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was dropping 2.95% and Semiconductor Sector Index Fund (SOXX) was down 1.28%.

Atomera (ATOM) dropped over 15% in Thursday's early session after the semiconductor components company disclosed plans to sell a yet-to-be-determined number of its common shares through a public offering. It also expects to provide underwriters for the upcoming stock sale with a 30-day option to buy additional shares of its stock to cover potential overallotments. Atomera said net proceeds will be used for working capital and general corporate purposes.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 1.42$ while Energy Select Sector SPDR (XLE) was down 1.55% in pre-market trade.

Murphy Oil (MUR) turned lower Thursday morning, dropping roughly 1.5%, following a small gain in extended trading Wednesday night, after saying it was forming a new joint venture with an American subsidiary of Brazilian state-run energy major Petrobras (PBR) to develop assets in the Gulf of Mexico. Both companies will contribute all of their producing Gulf asset to the joint project, which will be 80% owned by Murphy in exchange for $900 million in cash to be paid to Petrobras America. Petrobras also is eligible up to $150 million in contingent payment if the joint venture exceeds certain price and production targets beginning next year. Murphy is expecting the deal will increase its daily production by around 41,000 barrels of oil equivalent, consisting of 97% oil.

Commodities

November WTI Crude was down 1.75% while December Brent Crude was down 1.90%. November natural gas futures also was lower, falling 0.91%. Among commodity-related ETFs,, United States Oil Fund (USO) was down 1.17% and United States Natural Gas Fund (UNG) was down just 0.19%.

Gold was up 1.2%. SPDR Gold Trust (GLD) was up 0.5%. Silver was up 0.6% while iShares Silver Trust SLV) was up 0.7%.

Consumer

Consumer staples funds Consumer Staples Select Sector SPDR (XLP) was down 0.3%, while Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were unchanged.

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

Costco Wholesale (COST) slipped fractionally in Thursday's pre-market, falling about 0.5%, despite the discount warehouse retailer reporting a 10.3% increase in net sales to $13.64 billion during the five weeks ended Oct. 7 compared with the same period last year. Comparable-store sales, which take into account ASC 606 standards adopted by Costco with the start of its FY19, rose 8.4% company-wide during September, topping the Capital IQ consensus expecting 5.2% growth. E-commerce sales were 28.6% over year-ago levels last month.

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: SPY , VXX , QQQ , XLF , EEM



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