ETF Preview: ETFs, Futures Point Higher on US-N Korea Truce

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

SPDR S&P 500 ( SPY ): +0.4%

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

iShares MSCI Emerging Index Fund ( EEM ): +1.5%

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.5%

iPath S&P 500 VIX Short Term Futures TM ETN ( VXX ): -0.6%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV edged higher. Actively traded PowerShares QQQ ( QQQ ) was up 0.5%.

US stock futures were higher ahead of the open, adding to already sizable overnight gains amid signs of a truce between the US and North Korea, and pushback from lawmakers and business leaders against potential steel and aluminium tariffs that risk igniting a global trade war.

The Senate is set to vote on a rollback of key regulations of Dodd-Frank, the safeguards Congress put into place to prevent another financial crisis.

On the economic calendar are factory orders, out at 10 am ET. For Fed-watchers, Federal Reserve Governor Lael Brainard is set to speak about the economic and monetary policy outlook at 7 pm ET, followed by Dallas Fed Bank President Robert Kaplan at 8:30 pm ET.

Power Play: 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 0.7%.

Fate Therapeutics (FATE) fell 7.4% after the company reported financial results for Q4, with a wider-than-expected loss and revenue that matched analysts' estimates. The clinical-stage biopharmaceutical company posted a loss of $0.29 per share, compared with the prior-year period's $0.21 loss per share. Analysts polled by Capital IQ were expecting a loss of $0.25 per share. Revenue was $1 million, flat with the same quarter last year, and in line with the Street view.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was up 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.

Corporate Capital Trust (CCT) reported Q4 net investment income of $0.38 per share, down from $0.39 in the same period a year ago. Three analysts polled expected earnings of $0.40 per share. Total investment income was $106.8 million, up from $101.8 million in the same period a year ago.


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.

YY (YY) shares rose more than 4% after the company reported late Monday Q4 adjusted earnings of RMB14.77 ($2.27) per diluted ADS, up from RMB10.17 per share a year ago and above the $1.83 average estimate from analysts polled by Capital IQ. Net revenue rose to RMB3.63 billion ($557.4 million) from RMB2.48 billion a year ago, beating the $539.5-million consensus. Stating its Q1, 2018, guidance, the company said revenue will come in a range of RMB3.00 billion ($474.2 million) and RMB3.15 billion ($497.9 billion) -- that's in-line with the average analyst estimate of $478.6 million.


Dow Jones US Energy Fund (IYE) was flat while Energy Select Sector SPDR (XLE) was up 0.7%.

Petroquest Energy Inc (PQ) rose more than 8% after it reported Q4 revenue of $35 million, up from $16.4 million in the year ago quarter and better than the analyst consensus of $31.8 million on Capital IQ. Loss for the quarter was $0.02 per share, narrowing from a year ago loss of $0.46 per share and ahead of expectations for a loss of $0.06 per share.


Crude was up 1.1%. United States Oil Fund (USO) was up 1%. Natural gas was up 0.9% while United States Natural Gas Fund (UNG) was up 0.8%.

Gold was up 0.8%. SPDR Gold Trust (GLD) was down 0.1%. Silver was up 1.5%, while iShares Silver Trust (SLV) was up 1.3%.


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 .

Target (TGT) fell 0.7% after it reported early fiscal Q4 adjusted earnings of $1.37 per share, down from $1.45 per share in the prior year period and came in lower than the $1.38 per share Street estimate provided by Capital IQ. Revenue for the quarter ended Feb. 3 was $22.77 billion, up from $20.69 billion reported for the same period last year and came in higher than the $22.56 billion Street estimate. For fiscal Q1, the company expects adjusted earnings of $1.25 to $1.45 per share on comparable sales growth in the low-single digit. The Street consensus calls for earnings of $1.40 per share. For fiscal 2018, the company expects adjusted earnings of $5.15 to $5.45 per share on comparable sales growth in the low-single digit. The Street estimate calls for earnings of $5.26 per share.

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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