ETF Preview: ETFs, Futures Weaker as Cohn Resignation Sparks Jitters

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

SPDR S&P 500 ( SPY ): -0.8%

iShares MSCI Emerging Index Fund ( EEM ): -0.6%

SPDR Select Sector Fund - Financial ( XLF ): -0.6%

VanEck Vectors Gold Miners ETF ( GDX ): +0.2%

ProShares Trust Ultra VIX Short Term Futures ETF ( UVXY ): +5.4%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV edged lower. Actively traded PowerShares QQQ (QQQ) was down 0.7%.

US stock futures were pointing lower as investors fretted after the resignation of the White House's chief economic adviser, Gary Cohn.

In economic data news, The January US trade deficit widened 5.0% to -$56.6 billion, wider than the -$55.1 billion expected and a revised -$53.9 billion in December. Exports fell 1.3% while imports were unchanged.

The Q4 nonfarm productivity revision was flat versus the -0.1% preliminary read and the 0.1% expected drop. Unit labor costs were 2.5% higher, versus the preliminary 2.0% rise and 2.2% consensus. Q3 showed a 2.6% gain in productivity (revised from 2.7%) and a 1.0% unit labor cost jump (revised from -0.1%).

And, ADP reported February private payrolls increased 235,00 from a revised 244,000 gain in January.

Looking ahead, consumer credit, which will be released at 3 pm ET, is seen rising $17.4 billion in January vs $18.4 billion gain in December.

Federal Reserve Presidents William Dudley and Raphael Bostic were scheduled to speak.

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 quiet.

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

Momo (MOMO) ADSs gained nearly 12% after the Chinese mobile social networking company posted Q4 adjusted EPS and revenue that topped Wall Street analysts' estimates. Non-GAAP net income per ADS was $0.53 in the quarter, compared with $0.44 in the same period a year earlier. Analysts in a Capital IQ survey expected adjusted EPS of $0.46. Total net revenue was $386.4 million, increasing 57% from $246.1 million a year earlier. Analysts had predicted revenue of $383.1 million. For Q1, the company sees total net revenue of between $387.0 million and $402.0 million, representing a year-over-year increase of 46% to 52%. Analysts are currently forecasting Q1 revenue of $370.5 million.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was down 0.9%. Direxion Daily Financial Bull 3X shares (FAS) was down 2% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 2.2%.

Royal Bank of Scotland Group PLC (RBS) has agreed a $500 million settlement with New York State related to residential mortgage-backed securities in the run up to the financial crisis. Of this, $100 million is to be paid in cash to the State, with the rest as consumer relief to New York State homeowners and communities, Attorney General Eric Schneiderman said Tuesday. ADRs slipped 0.7% lower.


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

Vertex Energy (VTNR) reported a loss of $0.04 per share in Q4, two cents better than the average of three analysts for a loss of $0.06 per share as compiled by Capital IQ.


Crude was down 0.3%. United States Oil Fund (USO) was down 0.2%. Natural gas was up 0.9% while United States Natural Gas Fund (UNG) was up 0.8%.

Gold was down 0.2%. SPDR Gold Trust (GLD) was down 0.2%. Silver was down 0.8%, while iShares Silver Trust (SLV) was down 0.7%.


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 .

Dollar Tree (DLTR) was down 12% after posting fiscal Q4 adjusted earnings of $1.89 per share, up from $1.39 in the comparable period a year ago but a penny below the consensus of analysts polled by Capital IQ. The company said its total Q4 benefit from US tax reform was $583.7 million. For the quarter ended Feb. 3 total revenue of $6.36 billion was up from $5.64 billion in the comparable period a year ago. Analysts polled by CapIQ expected total revenue of $6.39 billion. Same-store sales for the Dollar Tree banner increased 3.8% and same-store sales for the Family Dollar banner increased 1% for the quarter. The company projects Q1 sales between $5.53 billion to $5.63 billion, straddling the Street projection of $5.60 billion, and EPS between $1.18 and $1.25, below the Street estimate of $1.37. Fiscal 2018 revenues are expected between $22.70 billion and $23.12 billion, below the Street estimate of $23.09 billion, and EPS is expected between $5.25 and $5.60, well below the Street estimate of $6.18.

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 also inactive.

Summit Therapeutics (SMMT) said it opened enrollment in a planned additional group in its phase 2 open-label clinical trial PhaseOut DMD. Enrollment is open to patients with DMD who participated in phase 1 clinical trials of ezutromid, but did not meet the entry criteria for the main PhaseOut DMD cohorts, according to a statement. Patients are eligible to participate regardless of their ambulatory status or age. Study assessments will include functional tests appropriate for the patient's ambulatory status, cardiac MRI, and lung function tests.

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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