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ETF Preview: ETFs, Futures Weaker as Wall Street Pores Over Earnings, Waits for Economic Data

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

iShares MSCI Emerging Index Fund (EEM): -0.7%

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

iShares Inc iShares MSCI Brazil ETF (EWZ): -1.2%

SPDR Select Sector Fund - Health Care (XLV): -0.03%

Invesco QQQ Trust, Series 1 (QQQ): -0.2%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV, were edging lower. Actively traded PowerShares QQQ (QQQ) were down 0.2%.

US stock futures were also weaker ahead of the open, as investors stayed on the sidelines ahead of a number of economic data and earnings reports. Trading volumes are expected to be moderate to light as markets will be closed for Good Friday.

Weekly jobless claims will be reported at 8:30 am ET, with Econoday pegging the number to be up 206,000 from 196,000 in the prior week.

At the same time, the Philadelphia Fed Business Outlook Survey is expected to show a reading of 10.2 for the month of April, versus the previous month's reading of 13.7.

Retail sales for March will also be reported, with forecasts for a month-on-month change of 0.8% versus a decline of 0.2% in February. Excluding autos, the figure is expected to be up 0.7%, from a decline of 0.4%.

The flash reading of the Composite Purchasing Managers' Index (PMI), out at 9:45 am ET, is forecast to be 54.3 in April, basically flat with the previous month. The manufacturing PMI is expected to be 52.2 versus 52.5 in the prior month, and the services PMI is projected to be 55.0, versus 54.8 in the previous month.

Business inventories will also be reported at 10 am ET, with forecasts for an increase of 0.3% in February, versus 0.8% in March. Leading indicators are also expected to come in at 0.3% for March, up from 0.2% in February.

Power Play: Financial

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) were both inactive as well.

E*TRADE Financial (ETFC) rose nearly 4% after it reported late Wednesday Q1 earnings of $1.09 per share compared with $0.88 a share in the same period of 2018, with the company saying the current year's result included a $0.08 per-share benefit. The Capital IQ consensus was for $0.93 on a normalized and GAAP basis. Revenue climbed to $755 million from $708 million a year earlier, and the company said the new result was a record high. The consensus was for $738 million. The company also declared a quarterly dividend of $0.14 per share payable on May 20 to shareholders of record by the close on May 13.

Winners and Losers

Technology

Technology Select Sector SPDR ETF (XLK) was down 0.1% 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.

Check Point Software Technologies (CHKP) fell 4% after it reported late Wednesday Q1 adjusted profit of $1.32 per share, up from $1.30 per share in the prior-year period and a penny a share higher than the $1.31 per share Street estimate provided by Capital IQ. Revenue for the quarter was $471.8 million, up from $452.3 million reported for the same period last year and higher than the $471.2 million Street estimate.

Industrial

Select Sector SPDR-Industrial (XLI), iShares Trust Dow Jones US Industrial Sector Index Fund (IYJ), and Vanguard Industrials (VIS) were quiet in pre-market trading.

Alcoa (AA) was down some 3% after it said late Wednesday that it swung to a Q1 adjusted loss of $0.23 a share from profit a year earlier of $1.01, and wider than the consensus on Capital IQ for a normalized loss of $0.13. Sales declined to $2.71 billion from $3.09 billion last year, while the Street was looking for $2.87 billion. The shipment outlook for 2019 bauxite, alumina and aluminum is unchanged, with bauxite seen between 47.0 and 48.0 million dry metric tons, alumina shipments between 13.6 and 13.7 million tons and aluminum shipments ranging from 2.8 to 2.9 million tons. Alcoa said it expects additional charges in Q2 ranging from $0.38 to $0.67 per share, depending on the outcome of the collective dismissal process at aluminum plants in Spain announced late year. It recorded $0.65 per share in charges in Q1.

Energy

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

Kinder Morgan (KMI) rose more than 1% after it reported late Wednesday Q1 adjusted per-share earnings of $0.25, higher compared to $0.22 in the year-ago quarter, and in line with the $0.25 consensus estimate compiled by Capital IQ. The energy infrastructure company posted Q1 revenues of $3.43 billion, up from $3.42 billion in the prior-year, but below the $3.63 billion consensus revenue estimate from CapIQ. Kinder Morgan also said that its board of directors approved a 25% quarter-over-quarter increase for its Q1 2019 dividend, which is now priced at $0.25 per share, payable on May 15 to common stockholders of record as of the close of business on April 30.

Commodities

Crude was up 0.2%. United States Oil Fund (USO) was up 0.2%. Natural gas was down 0.4%, while the United States Natural Gas Fund (UNG) was flat.

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

Health Care

Health Care SPDR (XLV) was down 0.2% 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%.

Eiger BioPharmaceuticals (EIGR) were down almost 13% after the company priced an underwritten public offering of 4.5 million of its common shares at $11 apiece, about a 15.6% discount to the stock's previous close, for total proceeds of $49.5 million. The company granted the underwriters a 30-day option to purchase up to 675,000 additional shares at the same offering price. Eiger said it expects to close the offering on or about April 23 and that proceeds will be used for general working capital and will fund activities in connection with its Hepatitis Delta Virus (HDV) clinical programs.

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.

Pier 1 Imports (PIR) said late Wednesday Q4 same-store sales decreased 13.7% and net sales decreased 19.5% to $412.5 million from the year-ago period. The CapIQ mean was for Q4 sales of $420.73 million. Net loss per share was $0.85, worse than estimates for a $0.24 loss. After closing 30 stores in FY19, it is now considering closing up to 45 locations in fiscal 2020 as leases expire and will be seeking occupancy cost reductions. Further, it said store closures could increase to up to 15% of stores if the company is unable to achieve performance goals, sales targets, and reductions in occupancy and other costs. It has identified approximately $70 million-$80 million of selling, general and administrative savings opportunity for fiscal 2020, most of which is expected to be realized in the second half of the year. Separately, it said Deborah Rieger-Paganis will assume the role of Interim Chief Financial Officer, effective immediately, following Nancy Walsh's departure. Rieger-Paganis is a managing director at global consulting firm AlixPartners.

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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