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ETF Preview: ETFs, Futures Point Higher; JP Morgan Starts Earnings Season with Better-Than-Expected Q1

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

iShares MSCI Emerging Index Fund (EEM): -0.8%

SPDR S&P 500 (SPY): +0.5%

SPDR Select Sector Fund - Financial (XLF): +1.6%

iShares Inc iShares MSCI Brazil ETF (EWZ): -2.5%

iShares China Large-Cap ETF (FXI): -1.3%

Broad Market Indicators

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

US stock futures were higher ahead of the start of the regular session, buoyed by the better-than-expected Q1 results of JPMorgan (JPM). The release of the bank's earnings also marks the start of the earnings season.

On the economic calendar at 8:30 am ET are import/export prices for March, with Econoday estimates for increases of 0.4% and 0.3%, respectively

At 10 am ET, the University of Michigan will report the April figure for its consumer sentiment survey, with expectations for a reading of 98.0 versus the prior month's 98.4.

The Baker-Hughes domestic oil-and-gas rig count is due at 1 pm ET.

Power Play: Financial

The Select Financial Sector SPDRs (XLF) was up 1.6%. Direxion Daily Financial Bull 3X shares (FAS) was up 3.3% and its bearish counterpart Direxion Daily Financial Bear 3X Shares (FAZ) was down 2.9%.

JPMorgan Chase & Co. (JPM) rose more than 2% after it reported earnings per share of $2.65 in Q1, up from $2.37 in the year-earlier period and ahead of Street estimates of $2.35 per share compiled by Capital IQ. Revenue in the period advanced to $29.12 billion from $27.9 billion, beating Street forecasts of $28.05 billion. The shares gained 2.5% in pre-market trading, set to open at the highest level this year of $108.85.

Winners and Losers

Technology

Technology Select Sector SPDR ETF (XLK) was up 0.5% and 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 both quiet in pre-market trade.

Amazon.com's (AMZN) Japan unit raised the price for Prime Membership for the first time in 11 years to 4,900 yen ($43.86) from JPY3900. AMZN rose marginally in pre-market trade.

Energy

Dow Jones US Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was up 1.1% in pre-market trade.

Anadarko Petroleum (APC) climbed by more than 29% as the company agreed to be acquired by Chevron (CVX) in a cash and stock deal valued at $33 billion, or $65 per share. Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share, bringing the total enterprise value to $50 billion. Chevron will issue approximately 200 million shares of stock and pay approximately $8 billion in cash. The company will also assume approximately $15 billion in debt. Chevron said the deal will be accretive to free cash flow and earnings one year after close. The transaction is expected to achieve run-rate cost synergies of $1 billion before tax and capital spending reductions of $1 billion within a year of closing, the company said. Chevron plans to divest $15 to $20 billion of assets between 2020 and 2022. It will use proceeds to further reduce debt and return additional cash to shareholders. Chevron also plans to increase its share repurchase rate from $4 billion to $5 billion per year upon closing. Chevron will continue be led by Michael Wirth as chief executive officer and will remain headquartered in San Ramon, CA. The companies expect to close in the second half of the year. CVX was down some 5%.

Commodities

Crude was up 1.3%. United States Oil Fund (USO) was up 1.0%. Natural gas was up 0.3%, while the United States Natural Gas Fund (UNG) was down 0.1%.

Gold was up 0.4%. SPDR Gold Trust (GLD) was up 0.2%. Silver was up 0.9%, while iShares Silver Trust (SLV) was up 0.6%.

Health Care

Health Care SPDR (XLV) and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were flat in pre-market trade. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.1%.

TRACON Pharmaceuticals (TCON) fell 47% after it said it terminated its phase 3 TAPPAS trial evaluating TRC105 in combination with Votrient (pazopanib) in patients with advanced or metastatic angiosarcoma due to futility, based on Independent Data Monitoring Committee recommendations. Data from this study will be analyzed and submitted for presentation at an upcoming scientific congress.

Consumer

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

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

Sotherly Hotels (SOHO) said late Thursday it has priced its underwritten public offering of 1.1 million 8.25% series D cumulative redeemable perpetual preferred shares at $25 apiece, for gross proceeds of $27 million. Underwriters have a 30-day option to buy up to an additional 162,000 shares to cover over-allotments. Net proceeds will be used to redeem the company's 7.25% senior unsecured notes due 2021 and for general corporate purposes.

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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