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ETF Preview: ETFs Futures Turn Higher as Street Digests Trade Deficit Data; Geopolitical Risks, Hurricane Irma Persist

Active broad-market exchange-traded funds in Wednesday's pre-market session:

SPDR Select Sector Fund - Financial ( XLF ): +0.5%

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

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): -2.1%

VanEck Vectors Gold Miners ETF ( GDX ): -0.4

ProShares Trust Ultra VIX Short Term Futures ETF ( UVXY ): -4.1%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.3%.

U.S. stock futures were higher as investors digested the latest data on trade deficit, even as geopolitical risks persisted and another catastrophic hurricane churning in the Atlantic weighed on market sentiment.

The Department of Commerce said the goods and services deficit was $43.7 billion in July, versus expectations for $44.6 billion. The June figure was revised to $43.5 billion from the initial figure of $43.6 billion. July exports were $194.4 billion, while July imports were $238.1 billion.

Crude oil futures were higher as Hurricane Irma threatened rigs in the Gulf of Mexico.

Power Play: Health Care

Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were flat in pre-market trading . Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.6%.

Palatin Technologies (PTN) rose 21% after it said it has entered into a collaboration and license agreement with Shanghai Fosun Pharmaceutical Industrial Development for exclusive rights to develop and commercialize bremelanotide for female sexual dysfunction in mainland China, Taiwan, Hong Kong SAR and Macau SAR. Under the terms of the agreement, Palatin will receive an upfront payment of $5.0 million and a $7.5 million milestone based on regulatory approval in China. Palatin has the potential to receive up to $92.5 million in sales related milestones and high single-digit to low double-digit royalties on net sales in the licensed territory. All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Fosun Pharma.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.5%. Direxion Daily Financial Bull 3X shares (FAS) was up 1% while its bearish counterpart, FAZ, was down 2.1%.

Liberty Tax (TAX) said that CEO John Hewitt was terminated by the board on Tuesday. The company said the board has appointed Ed Brunot as chief operating officer as an interim step before assuming the role of CEO. Hewitt is the sole holder of the company's class B common stock, and will remain as member of the board.

Technology

Technology Select Sector SPDR ETF (XLK), 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 flat.

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

Intel (INTC) has won a round in a fight with the European Union over a EUR1.06 billion ($1.26 billion) fine in a case that could have ramifications for disputes involving U.S. tech giants, including Alphabet, Inc.'s (GOOG) Google and Qualcomm, Inc. (QCOM), Bloomberg reported. The report said that EU's top court ruled that Intel's appeal had to be re-examined by a lower tribunal, criticizing judges for failing to properly analyze the economic aspects of the case in their 2014 decision to reject Intel's challenge. INTC shares were up 0.5%.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) was up 0.5%.

Denbury Resources (DNR) said production has restarted at five of its six fields impacted by Hurricane Harvey. The company estimates that approximately 90% of the 16,000 barrels of oil equivalent per day of net production shut-in as of Aug. 27 has been returned to production, and the company has not identified any significant damage at the fields. The only field that remains shut-in is Thompson Field, which had net production just prior to the storm of approximately 1,000 BOE per day. Production at Thompson Field is expected to return to full capacity over the next eight weeks. The primary impact of the storm to date is minimal cleanup costs and temporarily shut-in production, the company said. Denbury said it does not expect any insurance recovery related to the storm. Q3 production will be impacted at an estimated 2,000 to 2,200 BOE per day, the company said, and full-year production is expected to be within the company's previous range of 60,000 to 62,000 BOE per day.

Commodities

Crude was up 1%. United States Oil Fund (USO) was up 1.2%. Natural gas was down 0.1% while United States Natural Gas Fund (UNG) was flat. Gasoline futures fell 1.6% and United States Gasoline Fund (UGA) was down 0.8%.

Gold was up 0.04%. SPDR Gold Trust (GLD) was down 0.1%. Silver was up 0.4% while iShares Silver Trust (SLV) was up 0.2%.

Consumer

Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were inactive.

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 flat.

Francesca's Holdings (FRAN) fell 8% after the specialty retailer cuts its guidance for the FY, saying that the recent downturn is primarily reflective of merchandising missteps and as hurricane Harvey disrupted the company's supply chain. For the full year, net sales are now expected to be in the range of $481 million to $491 million, down from a prior range of $518 million to $537 million and missing the Street projection of $512.1 million. The guidance assumes a high-single digit decrease in comparable sales, revised from prior guidance assuming a 2% decrease to a 2% increase in comparable sales. Full year EPS is expected in a range of $0.71 to $0.81, cut from previous guidance expecting a range of range of $1.07 to $1.17 and short of the Street estimate of $1.00

For Q3 the company expects sales in the range of $105 million to $109 million, below the Street estimate of $122.5 million. The guidance assumes a Q3 comparable sales decrease in the mid- to high-teens compared to a 7% comparable sales increase in the prior year. Diluted EPS is expected to be in the range of $0.00 to $0.05, missing the Street projection of $0.23. The guidance includes the company's best estimate of the impact of Hurricane Harvey.

Meanwhile, in fiscal Q2, Francesca's reported adjusted EPS of $0.20, down from $0.27 in the comparable period a year ago and topping the estimate of $0.19 from analysts polled by CapIQ. Total revenues were $119.7 million were up from $115.3 million in the comparable period a year ago and just shy of the Street projection of $119.8 million. Comparable sales were down 3% for the quarter.

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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