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EEM

ETF Preview: ETFs, Futures Mixed as Corporate Earnings Remain in Focus

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

SPDR S&P 500 ( SPY ): -0.04%

SPDR Select Sector Fund - Financial ( XLF ): -0.08%

iShares MSCI Emerging Index Fund ( EEM ): -0.4%

iPath S&P 500 VIX ST Futures ETN ( VXX ): -1.2%

Invesco QQQ Trust, Series 1 ( QQQ ): +0.07%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) was up 0.07%.

US stock futures were were mixed ahead of the open, as investors focused on more corporate earnings with several readings on the US economy on tap.

Companies logging gains following the release of their earnings inlcude Boeing (BA), Trivago (TRVG) and Zix (ZIXI) while Noodles & Co (NDLS), STMicroelectronics (STM) and Texas Instruments (TXN) were gapping down.

In economic data news, the Mortgage Bankers' Association mortgage applications index rose 4.9%, along with a 2.0% gain in the purchase index and a 9.7% surge in the refinancing index for the week ended Oct. 19.

The Federal Housing Finance Agency house price index rose 0.3% for August, in line with forecasts and compared with July's 0.2%.

At 9:45 am ET, forecasters see little change in the PMI composite at 54.1 in October vs prior level of 53.4.

And, new homes sales, out at 10 am ET, are expected to hold steady and relatively solid at a 625,000 annualized rate in September vs August's 629,000 rate.

Power Play: Industrial

Select Sector SPDR-Industrial (XLI) and other funds iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), and Vanguard Industrials (VIS) were quiet in pre-market trading .

Boeing Company (BA) was up more than 4% after the company reported Q3 core EPS of $3.58, up from $2.62 during the year-ago quarter, and beating the Capital IQ consensus forecast of $3.47. Revenue for the quarter was $25.15 billion, up from $24.22 billion for the same period last year, and ahead of the analyst forecast of $23.84 billion. The airplane manufacturer raised its 2018 full-year revenue guidance to a range of $98 billion to $100 billion, from previous guidance of $97 billion to $99 billion. It also raised its 2018 non-GAAP core earnings per share guidance to a range of $14.90 to $15.10, from $14.30 to $14.50. Analysts are expecting core EPS of $14.64 and sales of $98.48 billion.

Winners and Losers

Financial

The Select Financial Sector SPDRs ( XLF ) was up 0.04%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.1% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was flat.

AllianceBernstein Holding L.P (AB) rose more than 1% after it reported Q3 adjusted diluted net income per unit of $0.69, up from $0.51 for the year-ago quarter, and beating the Capital IQ consensus forecast of $0.63. Total net revenue for the quarter was $850.2 million, up from $812.2 million during the same period last year, while adjusted net revenue was $727.1 million, up from $719.7 million, and ahead of the analyst forecast of $701.4 million.

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 flat.

Zixi (ZIXI) rose more than 10% after it reported adjusted EPS rose to $0.09 in Q3 from $0.07 a year earlier, just ahead of analysts' estimates of $0.08 in a Capital IQ poll for the email security company. Revenue increased 8% to a record $17.9 million, ahead of the $17.73 million estimate. For Q4, the company forecasts revenue to range between $18.0 million and $18.2 million, and non-GAAP adjusted EPS of $0.09. the Street view is for EPS of $0.08 on revenue of $17.95 million. For fiscal year 2018, it is increasing the midpoint of its revenue guidance range to between $70.0 million to $70.2 million, an increase of 7% compared to fiscal 2017, and raises its diluted non-GAAP adjusted EPS guidance to $0.33 from $0.31 previously. Consensus is for EPS of $0.31 on revenue of $69.85 million.

Energy

Dow Jones US Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was up 0.02% in the pre-market session.

DTE Energy (DTE) reported Q3 operating earnings of $2.13 per share, excluding one-time items, compared with the prior-year period's $1.48 per share. Analysts polled by Capital IQ were expecting EPS of $1.74. The company now expects fiscal 2018 EPS of $6.12 - $6.48 versus the Street view of $6.17. The prior guidance range was for $5.94 - $6.32. DTE Energy also provided 2019 operating EPS early outlook guidance range of $5.97 - $6.33. Analysts are looking for EPS of $6.27.

Commodities

Crude was up 0.5%. United States Oil Fund (USO) was up 0.6%. Natural gas was down 0.8% while United States Natural Gas Fund (UNG) was down 0.8%.

Gold was down 0.5%. SPDR Gold Trust (GLD) was down 0.1%. Silver was down 0.4%, while iShares Silver Trust (SLV) was down 0.2%.

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 down 0.6%.

Clementia Pharmaceuticals (CMTA) rose some 35% after it said it plans to submit a New Drug Application (NDA) for palovarotene to the U.S. Food and Drug Administration (FDA) in the second half of 2019. Based on recent interactions with the FDA, including a Type B meeting held earlier Tuesday as part of palovarotene's Breakthrough Therapy Designation, the FDA has agreed that available data would support filing of an NDA for palovarotene for the prevention of heterotopic ossification (HO) associated with flare up symptoms in patients with fibrodysplasia ossificans progressiva (FOP), the drugmaker said. The FDA based its assessment on the efficacy and safety data available from the completed Phase 2 clinical program, which showed a statistically significant reduction in mean new HO volume, or bone volume, associated with flare-ups of FOP at 12 weeks as compared to placebo or untreated flare-ups.

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) was down 0.4% while retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were inactive in pre-market trade.

Noodles & Company (NDLS) fell 14% after it reported adjusted EPS rose to $0.04 in Q3 from $0.02 a year earlier, meeting analysts' expectations in a Capital IQ poll. Revenue rose to $116.7 million from $114.2 million a year ago, exceeding the $114.80 million estimate. For the full year 2018, it expects revenue of $457.0 million to $460.0 million and adjusted EPS of $0.01 to $0.04, compared with the Street views of $0.03 for EPS on revenue of $455.86 million. The company also said it launched an 8.75-million class A secondary offering. The selling shareholders will also grant the underwriters a 30-day option to purchase up to 1,312,500 additional shares of common stock.

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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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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