ETF Preview: ETFs, Futures Point to Higher Open Ahead of Yellen Speech (NYSEARCA:SPY)

Active broad-market exchange-traded funds in Wednesday’s pre-market session: SPDR S&P 500 ETF Trust (NYSEARCA:SPY): +1.1% SPDR Select Sector Fund – Financial (XLF): +1.6% iPath S&P 500 VIX ST Futures ETN (VXX): -2.8% iShares MSCI Japan Index Fund (EWJ): -0.1% Market Vectors Gold Miners ETF (GDX): -0.8% Broad-Market Indicators Most broad-market exchange-traded funds, including SPY, IWM, IVV and others, were higher. Meanwhile, actively traded PowerShares QQQ (QQQ) was up 1.5%. U.S. stock futures were pointing to a moderately higher open as Wall Street awaited the testimony of Federal Reserve Chair Janet Yellen to the House Financial Services Committee at 10 am. Investors are hoping to get more clues as to what the Fed’s monetary policy will be particularly in light of the recent pressure on equities and volatility in the markets. In earnings news, SolarCity (SCTY), Walt Disney (DIS) and Time Warner (TWX) were in the red after reporting their financial results. Looking ahead, Cisco Systems (CSCO), Twitter (TWTR), Tesla Motors (TSLA) and Whole Foods (WFM) will all be reporting in the after hours session. Power Play: Technology Technology Select Sector SPDR ETF (XLK) was up 1.3% while Shares 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 inactive. SPDR S&P International Technology Sector ETF (IPK) was also unchanged. Semiconductor ETFs SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were flat in pre-market trading. Alphabet (GOOGL) was up 1.4% after the National Highway Traffic Safety Administration said in a letter to Google’s self-driving car project director that computers that operate cars may be deemed as the “driver.” “We agree with Google its SDV will not have a “driver” in the traditional sense that vehicles have had drivers during the last more than one hundred years,” the agency said in the letter. “If no human occupant of the vehicle can actually drive the vehicle, it is more reasonable to identify the “driver” as whatever (as opposed to whoever) is doing the driving. In this instance, an item of motor vehicle equipment, the SDS, is actually driving the vehicle.” The NHTSA said it will consider initiating rulemaking to address whether the definition of “driver” should be updated in response to changing circumstances. Winners and Losers Financial Select Financial Sector SPDRs (XLF) was down 1.4%. Daily Financial Bull 3X shares (FAS) was down 3.3% while its bearish counterpart, FAZ, was up 4.5%. Deutsche Bank AG (DB) was up some 8% following media reports that the German lender is considering buying back several billion euros of its senior bonds.

The recovery in the bank’s share price comes after two days of falls amid a broader rout of bank stocks due to concerns over their profitability and troubled loans. The surge in the bank’s share price has also eased concerns over its balance sheet. The Financial Times reported that Deutsche Bank was expected to focus its emergency buyback plan on some EUR50 billion of senior bonds, or the debt that is repaid first if a company goes out of business. According to the FT report, the buyback plan was not likely to include so-called contingent convertible bonds, or cocos, the bank’s riskiest debt. These bonds, along with the bank’s shares, have bore the brunt of the investor sell-off in recent days. Energy Dow Jones U.S. Energy Fund (IYE) was flat while Energy Select Sector SPDR (XLE) was up 1% in the pre-market session. SolarCity (SCTY) was down 32.4% after the solar energy company reported Q4 adjusted net loss was $231.9 million or $2.37 per share, better than expectations for a loss of $2.59 a share. Revenues surged 61% year-over-year to $115 million, topping the $105.7 million consensus. For Q1, SolarCity expects an adjusted loss of $2.55 to $2.65 a share, wider than forecasts for a loss of $2.36 a share. Operating expenses are forecast at $230 million to $240 million. The company also expects to install 180 megawatts. For 2016, the company said it continues to target installations of 1.25 gigawatts. Commodities Crude was up 0.1%.

United States Oil Fund (USO) was down 0.7%. Natural gas futures were down 1.8%. United States Natural Gas Fund (UNG) was down 1.6%. Gold was down 0.9% and SPDR Gold Trust (GLD) down 0.3%. Silver was down 1.4% while iShares Silver Trust (SLV) was up 0.3%. Consumer Consumer Staples Select Sector SPDR (XLP) was up 1% while other consumer staples funds iShares Dow Jones US Consumer Goods (IYK) and Vanguard Consumer Staples ETF (VDC) were inactive. Consumer Discretionary SPDR (XLY) was down 0.1% while retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were also flat. Walt Disney (DIS) was down 5.4% after it reported Q1 earnings of $1.63 per share, better than the analyst consensus of $1.45 per share on Capital IQ. Revenue was $15.24 billion, ahead of expectations of $14.78 billion. The company noted that the global success of Star Wars: The Force Awakens drove record quarterly operating income at both Studio Entertainment and Consumer Products & Interactive Media, which grew at 86% and 23%, respectively. Health Care Health Care SPDR (XLV) was up 1% while other funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were flat. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 1.5%. Celgene (CELG) was up 1% after it said it has selected Medidata’s (MDSO) Clinical Cloud enterprise technology platform for its clinical trials worldwide. Financial terms of the transaction weren’t disclosed. Celgene will use the Medidata Clinical Cloud for data management, study planning and design, trial operations, analytics, and patient engagement. MDSO shares were flat in pre-market trading.

The ETF is up 0.80% or $1.49 after the news, hitting $186.84 per share. SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has declined 10.86% since July 7, 2015 and is downtrending. It has outperformed by 0.15% the S&P500.

SPDR S&P 500 ETF Trust is an exchange traded fund. The ETF has a market cap of $165.00 billion. The Trust corresponds to the price and yield performance of the S&P 500 Index. It currently has negative earnings. The S&P 500 Index is composed of 500 selected stocks and spans over 24 separate industry groups.

Add Comment