ETF Preview: ETFs, Futures Lower as Italy's Post-Election Rattles Markets

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

SPDR S&P 500 ( SPY ): -0.3%

SPDR Select Sector Fund - Financial ( XLF ): -0.2%

iShares MSCI Emerging Index Fund ( EEM ): -0.9%

Credit Suisse AG - VelocityShares Daily 2x VIX Short Term ( TVIX ): +3.9%

ProShares Trust Ultra VIX Short Term Futures ETF ( UVXY ): +2.99%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV edged higher. Actively traded PowerShares QQQ (QQQ) was down 0.1%.

US stock futures were pointing to a negative open as signs of further political instability in post-election Italy lessened investors' appetite for risks.

At 9:45 am, the final February reading for the PMI Services index is expected to come in at 55.9 vs the prior month's level of 53.3, according to data compiled by Econoday.

At 10 am, the ISM non-manufacturing index is expected to slow a bit in February to 58.8 vs January's robust 59.9.

Federal Reserve Vice Chairman Randal Quarles is scheduled to speak in a banking forum in Washington, DC.

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 quiet.

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

Qualcomm River Holdings, an indirect wholly owned subsidiary of Qualcomm (QCOM), extended its tender offer to purchase all of the outstanding common shares of NXP Semiconductors (NXP) to 5 pm ET March 9. The tender offer will continue to be extended until all conditions are satisfied or waived, or until the tender offer is terminated. As of 5 pm ET March 2, approximately 10.5% of the outstanding NXP shares have been validly tendered. Separately, the US government ordered Qualcomm to delay its shareholder meeting this week to provide it more time to review rival Broadcom's (AVGO) proposed $117 billion takeover of the chip maker.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was down 0.5%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.4% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was flat.

XL Group (XL) shares were 29.7% higher in Monday's pre-market session after the company agreed to be acquired by French insurer AXA for $15.3 billion in cash. Under the terms of the deal, XL Group shareholders will receive $57.60 per share, which represents a 33% premium to the stock's closing share price on March 2. The deal is expected to close in the second half of 2018, subject to shareholder and regulatory approvals and other customary closing conditions.


Dow Jones US Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both flat.

OCI Partners (OCIP) owner and operator of an integrated methanol and ammonia production facility on the Texas Gulf Coast, Monday reported a Q4 swing to profit on higher revenue, year-over-year. OCI Partners reported Q4 net income of $13 million, compared with a net loss of $17 million a year earlier. The partnership reported Q4 revenue of $98 million, compared with $66 million a year earlier. OCI Partners also reported Q4 EDITDA of $38 million, against $16 million a year ago.


Crude was up 0.1%. United States Oil Fund (USO) was down 0.2%. Natural gas was down 0.4% while United States Natural Gas Fund (UNG) was down 0.3%.

Gold was down 0.1%. SPDR Gold Trust (GLD) was down 0.1%. Silver was down 0.1%, while iShares Silver Trust (SLV) was down 0.5%.


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 also quiet in pre-market trading .

Walmart (WMT) is reportedly to start offering prepared meals at its stores, according to Bloomberg. The move, seen as a tactic to help the company sell more food, will also enable it to attract customers from restaurant chains, the report said. Ten different meals are now available in 250 stores, and the program will expand to 2,000 locations by year's end.

Health Care

Health Care SPDR (XLV) and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were quiet. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.1%.

Vericel (VCEL) rose more than 11% after it said it swung to a Q4 profit as revenue surged. EPS was $0.01 per share on a GAAP basis in the December quarter, compared with a net loss of $0.34 per share, in the year-earlier period. Q4 revenue increased 41% to $23.4 million. Four analysts polled by Capital IQ had predicted net loss per share of $0.07 on revenue of $18.8 million. It was not clear whether the figures were comparable. The company expects FY18 total product revenue, excluding additional license revenue, to be in the range of $73 million to $78 million compared to FY17 total product revenue, excluding license revenue, of $62.8 million.

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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