ETF Preview: ETFs, Futures Looks to Open Higher as Investors Turn to Earnings, Shrug Off Trade Concerns

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

SPDR Select Sector Fund - Financial ( XLF ): +0.1%

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

iShares MSCI Emerging Index Fund ( EEM ): -0.3%

VanEck Vectors Gold Miners ETF ( GDX ): -0.1%

iShares Inc iShares MSCI Brazil ETF ( EWZ ): +0.9%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV edged higher. Actively traded PowerShares QQQ (QQQ) was up 0.01%.

US stock futures were pointing to modest gains ahead of the open as earnings reports remained in the forefront. CVS (CVS) and Wendy's (WEN) were among gainers, while Disney (DIS) and Snap (SNAP) slipped lower.

No major US economic releases are slated for Wednesday, but the Energy Information Administration will report its domestic oil inventories bulletin at 10:30 am ET.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) 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 both flat.

Extreme Networks (EXTR) dropped over 16% after the company said Q4 GAAP net loss per share was $0.05 and non-GAAP EPS was $0.20. The CapIQ mean was for GAAP EPS of $0.11 and normalized EPS of $0.19. Sales rose 56% year over year to $278.3 million, missing estimates for $279.2 million. Q1 sales are seen between $230.0 million to $240.0 million, below forecasts for $268.7 million. GAAP EPS are seen between a net loss of $0.12 to $0.06 per share, worse than expectations for $0.17. Non-GAAP EPS are seen between $0.00 to $0.07, below forecasts for $0.21.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was inactive. Direxion Daily Financial Bull 3X shares (FAS) were also quiet while its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) were down 0.9% in the pre-market session.

Starwood Property Trust (STWD) fell some 1% after it said that it agreed to buy the Energy Financial Services' project finance debt business and loan portfolio of General Electric's (GE) GE Capital for $2.56 billion, including $400 million of unfunded loan commitments. The real estate investment trust company said that the acquisition complements Starwood Energy Group's platform, which concentrates on energy infrastructure equity investments. The company said that it expects the transaction to be accretive to core earnings.


Dow Jones US Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was down 0.1% in pre-market trade.

Parsley Energy (PE) fell more than 4% after it reported late Tuesday Q2 adjusted earnings of $0.39 per share, matching the Street estimate by a CapIQ poll and higher than $0.05 in the prior-year period. The oil and natural gas company recorded a revenue of $467.8 million, up from $213.7 million in the same period last year. That result easily topped the analyst consensus of $432.3 million. Net oil production rose 14% quarter-over-quarter and 57% year-over-year to 67.7 thousand barrels of oil per day. Total net production averaged 107.8 million barrels of oil equivalent per day.


Crude was down 1.1%. United States Oil Fund (USO) was down 0.2%. Natural gas was up 0.2% while United States Natural Gas Fund (UNG) was flat.

Gold was down 0.02%. SPDR Gold Trust (GLD) was up 0.1%. Silver was down 0.2%, while iShares Silver Trust (SLV) was down 0.1%.


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.

Walt Disney Company (DIS) fell some 0.5% after it reported late Tuesday Q3 adjusted earnings of $1.87 per share, up from $1.58 per share last year but below the analyst consensus of $1.95 per share. Revenue was $15.22 billion, up from $14.23 billion in the year ago quarter but shy of expectations of $15.34 billion.

Health Care

Health Care SPDR (XLV) was up 0.01% 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 0.1% in pre-market trading .

CVS Health (CVS) rose more than 3% after it said Q2 GAAP loss per share was $2.52 and adjusted EPS was $1.69. The CapIQ mean was for $1.22 GAAP and $1.61 normalized. Q2 sales increased 2.2% to $46.7 billion, above estimates for $46.34 billion. Same store prescription volume grew 9.5%. It cut its FY GAAP EPS outlook to $1.40 to $1.50 from $5.11 to $5.32 and below expectations for $5.53. It narrowed its adjusted EPS guidance to $6.98 to $7.08 from $6.87 to $7.08, still in line with forecasts for $7.00. For Q3, it expects GAAP operating profit to decline in the range of 4.5% to 7.0% and adjusted consolidated operating profit to decline in the range of 2.5% to 5.0%. Additionally, it expects to deliver GAAP diluted EPS of $1.29 to $1.34 and adjusted EPS of $1.68 to $1.73. The Street view is for GAAP EPS of $1.39 and normalized EPS of $1.75.

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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