ETF Preview: ETFs, Futures Point to Lower Open on Possibility of More Interest Rate Hikes; Factory Orders Still Ahead

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

iShares Inc iShares MSCI Brazil ETF ( EWZ ): -0.8%

iShares MSCI Emerging Index Fund ( EEM ): -1.0%

SPDR S&P 500 ( SPY ): -0.2%

VanEck Vectors Gold Miners ETF ( GDX ): +0.5%

Invesco QQQ Trust, Series 1 ( QQQ ): -0.4%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) was down 0.4%.

US stock futures were pointing to a negative open as rising interest rates and signals from the Federal Reserve that more hikes could be on the horizon put investors on edge.

Weekly initial jobless claims totaled 207,000 versus the consensus for 213,000 and compared with 215,000 (revised from 214,000) in the prior week . Continuing claims declined to 1.650 million from a revised count of 1.663 million.

Looking ahead, factory orders will be released at 10 am ET and are seen rising 2.1% for August vs the prior month's decline of 0.8%.

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 flat.

Cloudera (CLDR) and Hortonworks (HDP) jointly announced late Wednesday that they have agreed to combine in an all-stock merger of equals. The deal will create the world's leading next generation data platform provider, spanning multi-cloud, on-premises and the Edge, the companies said in a statement. The combination establishes the industry standard for hybrid cloud data management, accelerating customer adoption, community development and partner engagement. Cloudera stockholders will own 60% of the equity of the combined company and Hortonworks stockholders will own 40%. Hortonworks shareholders will receive 1.305 common shares of Cloudera for each share of Hortonworks stock owned. The companies have a combined fully-diluted equity value of $5.2 billion based on closing prices on Tuesday. The companies said they expect to complete the deal in Q1. CLDR shares rose more than 21% and HDP shares rose nearly 22%.

Winners and Losers


The Select Financial Sector SPDRs (XLF) was flat. Direxion Daily Financial Bull 3X shares (FAS) and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was down 0.7%.

Monmouth Real Estate Investment (MNR) fell nearly 9% after it said that it priced a sale of 8 million shares at a public offering price of $15.00 per share, before underwriting discounts. The offering is expected to close on or about Oct. 9, according to a statement. The firm has granted the underwriters an option for 30 days to purchase up to 1.2 million additional shares at the public offering price, less the underwriting discount. The company estimates net proceeds of about $115.2 million, or $132.5 million if the underwriters exercise their option in full. Net proceeds will be used to purchase properties and fund expansions of existing properties, to repay borrowings outstanding under an unsecured revolving credit facility, and for general corporate purposes.


Dow Jones US Energy Fund (IYE) was inactive and Energy Select Sector SPDR (XLE) was up 0.01% in the pre-market session.

SAExploration Holdings (SAEX) rose some 15% after it said it has been awarded a $100 million new marine project in South Asia for a major National Oil Company. The project is expected to commence late in Q4 of 2018 and is expected to conclude in Q2 of 2019, the firm said, adding that the project will be performed using ocean-bottom nodal recording technology and related techniques.


Crude was down 0.7%. United States Oil Fund (USO) was down 0.4%. Natural gas was up 0.4% while United States Natural Gas Fund (UNG) was flat.

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


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.

Constellation Brands (STZ) shares rose nearly 4% after the alcoholic beverages company reported fiscal Q2 results that topped Wall Street expectations. Adjusted EPS increased 16% to $2.87 in the three months ended Aug. 31, surpassing the 2.61 average estimate of analysts surveyed by Capital IQ. Fiscal Q2 revenue increased to $2.30 billion, from $2.09 billion, exceeding the analyst consensus of $2.25 billion. Moving forward, the company anticipates FY 19 EPS in the range of $9.60 to $9.75, up from a prior view of $9.40 to $9.70. Analysts had projected EPS of $9.34.

Health Care

Health Care SPDR (XLV) 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 down 0.04%.

Arrowhead Research (ARWR) surged more than 16% after the company said earlier that it entered into a license and collaboration agreement with Johnson & Johnson's (JNJ) Janssen Pharmaceuticals, Inc. to develop and commercialize ARO-HBV, the company's third generation subcutaneously administered RNA interference (RNAi). Arrowhead has also entered into a research collaboration and option agreement with Janssen to potentially collaborate for up to three additional RNA interference (RNAi) therapeutics against new targets to be selected by Janssen. The transactions have a combined potential value of over $3.7 billion for Arrowhead. Under the terms of the agreement, Arrowhead will receive $175 million as an upfront payment. Separately, Johnson & Johnson Innovation will make a $75 million equity investment in Arrowhead at a price of $23 per share of Arrowhead 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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