ETF Preview: ETFs, Futures Look for Direction Ahead of FOMC Policy Decision

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

SPDR S&P 500 ( SPY ): -0.03%

iShares MSCI Emerging Index Fund ( EEM ): -0.2%

Invesco QQQ Trust, Series 1 ( QQQ ): +0.05%

iShares MSCI EAFE ETF ( EFA ): -0.4%

iPath Series B S&P 500 VIX Short-Term Futures ET ( VXXB ): -0.2%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV, were lower. Actively traded PowerShares QQQ ( QQQ ) were up 0.05%.

US stock futures were mostly flat ahead of the opening bell as traders stayed on the sidelines ahead of an interest rate policy setting decision by a committee of the US Federal Reserve.

At 2 pm, analysts expect to see no change in the federal funds target rate band as a result of the conclusion of the two-day policy setting meeting of the Federal Open Market Committee. The target band is currently 2.25%-2.50%.

Power Play: Consumer

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

Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were quiet in pre-market trade.

General Mills (GIS) shares climbed some 5% after the breakfast cereal maker reported fiscal Q3 adjusted profit of $0.83 per share, up from $0.79 per share in the prior year period and higher than the $0.69 per share Street estimate provided by Capital IQ. Net sales for the quarter ended Feb. 24 were $4.20 billion, up from $3.88 billion reported for the same period last year and in line with the Street estimate. For fiscal 2019, the company said it expects adjusted earnings to range from flat to up 1% from 2018, while net sales are expected to be in the lower end of the 9% to 10% growth guidance in constant currency. The Street consensus calls for adjusted earnings of $3.07 per share on an 8% growth in revenues.

Winners and Losers


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

KKR (KKR) said that it will not raise its offer price of AUD3.40 ($2.47) per share for MYOB amid heightened pressure from investors for the board of the Australian tax and accounting software maker to reconsider its support for the buyout firm's proposal. The private equity firm had previously made a AUD3.70 offer for the software company before lowering it to AUD3.40 after completing due diligence. In early March, New York-based Australian-run hedge fund Manikay Partners urged MYOB's board to reconsider KKR's bid, even suggesting that the buyout firm "took advantage of the temporary adverse market conditions" when it lowered its bid. In a letter sent to the MYOB board, KKR said that the AUD3.40 per share bid is its "best and final" offer but it also retained its rights to raise its bid if MYOB receives a higher rival offer.


Technology Select Sector SPDR ETF (XLK) and other tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were inactive.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were both quiet in pre-market trade.

Alphabet (GOOG) slipped marginally lower after it was fined 1.49 billion euros ($1.69 billion) for allegedly blocking rivals' search advertisements on several websites. Websites including blogs and travel sites have built-in search functions, so when a consumer searches using that search function, the website gives results and advertisements that appear alongside the results, the commission said. Through Adsense for Search, the company acted as sort of an intermediary, "like an advertising broker" between advertisers and website owners that wanted to profit from the space around their search results. Google, starting in 2006, included exclusivity clauses in contracts that prohibited publishers from placing search advertisements from competitors on their search pages. In 2009, the company started replacing the exclusivity contracts with premium placement clauses that required publishers to reserve the most-profitable space in their results for Google advertisements, the EU said. That prevented competitors from placing ads in the most-visible parts of website search results.


Dow Jones US Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was down 0.4%.

Maersk Oil Trading and Investments A/S, a unit of Danish conglomerate A.P. Møller - Mærsk A/S, said late Tuesday that it sold 17,272,593 shares in French oil major Total (TOT), representing its entire stake. According to the Danish conglomerate, it initiated the sale through an accelerated book-building process. It anticipates gross proceeds of EUR884 million ($1 billion), or EUR51.18 per share, from the transaction, which it expects to close on March 22.


Crude was down 0.9%. United States Oil Fund (USO) was down 0.8%. Natural gas was down 0.5% while the United States Natural Gas Fund (UNG) was down 0.1%.

Gold was down 0.3%. SPDR Gold Trust (GLD) was up 0.1%. Silver was down 0.1%, while iShares Silver Trust (SLV) was down 0.1%.

Health Care

Health Care SPDR (XLV) and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were flat in pre-market trade. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was also inactive.

Motif Bio (MTFB) surged nearly 51% after it said pre-market that the Food & Drug Administration has granted its request for a Type A meeting to discuss the points raised in the Complete Response Letter that it received from the agency pertaining to the New Drug Application for iclaprim for the treatment of acute bacterial skin and skin structure infections. The company said that critical personnel from the FDA will take part in the meeting, which is set for May 3.

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 All rights reserved. Unauthorized reproduction is strictly prohibited.

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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