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ETF Preview: ETFs, Futures Trim Gains as December Retail Sales Slump to Lowest Level Since 2009

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

iShares MSCI Emerging Index Fund ( EEM ): -0.5%

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

SPDR Select Sector Fund - Financial ( XLF ): -0.8%

VanEck Vectors Gold Miners ETF ( GDX ): -0.4%

Shares China Large-Cap ETF ( FXI ): -0.4%

Broad Market Indicators

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

US stock futures trimmed gains ahead of the open as Wall Street digested the largest decline in December retail sales in nine years, as well as an increase in weekly jobless claims.

The US Census Bureau reported that retail sales sank 1.2% in December -- the worst decline since September 2009. Forecasts were for retail sales to remain flat. Investors are now worried that the figure could weigh on the country's gross domestic product (GDP) growth for Q4. The government's expects Q4 GDP to slow to $2.7%.

In other data releases, weekly jobless claims rose by 4,000 to a seasonally adjusted 239,000 versus estimates for claims to fall to 225,000. Continuing claims increased by 37,000 to 1.77 million. Meanwhile, the four-week average of new jobless claims rose 6,750 to 231,750 -- the highest level since the January 2018.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) and other tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were inactive.

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

Sierra Wireless (SWIR) reported late Wednesday Q4 EPS of $0.25, just short of the consensus estimate of $0.26 EPS on Capital IQ. Revenue was $201.4 million, below the analysts' estimate of $204.9 million. This compares to EPS of $0.28 on revenue of $183.5 million in the comparable quarter a year ago.

For Q1, it sees non-GAAP net loss of $0.02 - $0.06 per share on revenue of $170 million - $174 million. Analysts are looking for EPS of $0.21 on revenue of $197.7 million, if comparable. For FY19, the company expects EPS of $0.30 versus the Street view of $1.20 EPS. Revenue is expected to be flat with the prior year's $793.6 million, versus the Street view of $855.4 million.

Winners and Losers

Financial

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

Sun Life Financial (SLF) reported late Wednesday Q4 underlying earnings of CAD1.19 per share, compared with the prior-year period's CAD1.05 per share. Analysts polled by Capital IQ were expecting EPS of CAD1.16. Revenue was CAD8.18 billion, from CAD7.8 billion in the same quarter last year. The Street view was for revenue of CAD6.28 billion, but this may not be comparable. The company declared a dividend of $0.50 per share on the common shares, payable March 29, 2019 to shareholders of record at the close of business on March 1, 2019. The board also declared dividends on the company's class A non-cumulative preferred shares, payable on March 29, 2019 to shareholders of record at the close of business on March 1, 2019.

Energy

Dow Jones US Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both inactive in pre-market trade.

Scorpio Tankers (STNG) rose nearly 7% after the marine petroleum transporter posted an adjusted loss of $0.38 per share in Q4, compared with the prior-year period's $1.38 loss per share. Analysts polled by Capital IQ were expecting EPS of $0.54 loss per share. Revenue was $167.5 million, up from $148.4 million in the same quarter last year. The Street view was for revenue of $154.3 million. The company said its quarterly cash dividend of $0.10 per share will be payable on or about March 28 to all shareholders of record as of March 13. Scorpio also said that all $57.5 million of its 8.25% senior unsecured notes due June 2019 will be redeemed on March 18. The redemption price will be 100% of the principal amount plus accrued and unpaid interest.

Commodities

Crude was down marginally. United States Oil Fund (USO) was up 0.1%. Natural gas was up 0.9% while the United States Natural Gas Fund (UNG) was up 0.5%.

Gold was down 0.1%. SPDR Gold Trust (GLD) was up 0.4%. Silver was down 1%, while iShares Silver Trust (SLV) was up 0.4%.

Health Care

Health Care SPDR (XLV) and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were flat in pre-market trade. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.2%.

Invacare (IVC) jumped some 24% after the company said late Wednesday Q4 sales decreased 2.3% to $244.6 million from the year-ago period but topped the CapIQ mean for $239.22 million. GAAP loss per share was $0.04, and adjusted net loss per share was $0.16. Estimates were for a loss of $0.42 normalized and a loss of $0.46 GAAP. It said it expects to achieve an Adjusted EBITDA run-rate target of $85-$105 million by year-end 2020 with a combination of low single-digit sales growth, gross margin improvements and substantial cost reductions.

Consumer

Consumer Staples Select Sector SPDR (XLP) was down 0.3% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were inactive.

Consumer Discretionary Select Sector SPDR (XLY) was up 0.3% and retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were quiet in pre-market trade.

Fossil Group (FOSL) fell some 17% after i t report ed late Wednesday Q4 earnings of $0.94 per share, including about $0.07 per share in charges, vs. a year ago loss of $1.65 per share, which included $0.09 per share in charges and tax charges of $2.20 per share. Analysts were expecting GAAP earnings of $1.05 per share and non-GAAP earnings of $1.21 per share. The results look to be a miss. Sales were $787 million, down from $921 million a year ago and below the analyst consensus of $805 million.

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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