The market will open trading on Monday with momentum on its side after a gain of over 2 percent in the SPDR S&P 500 ETF (NYSE:SPY) last week. This broad measure of large-cap stocks is now trading at the upper end of its range this year and could be setting up for another potential breakout.
Nevertheless, traders will be paying close attention to several important company earnings announcements that will likely set the tone for the remainder of the summer.
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In addition, key economic events to watch this week will include: existing home sales, weekly jobless claims and manufacturing data.
Here are the key ETFs to watch for the week of July 20:
Technology Select Sector SPDR (NYSE:XLK)
Technology stocks will be in focus this week as sector bellwethers International Business Machines, Apple and Microsoft report earnings. All three of these companies are represented in XLK, which tracks 74 large-cap tech stocks.
XLK has over $13 billion in total assets and charges an expense ratio of 0.15 percent. This ETF is up 5 percent so far this year and is sitting right near its previous highs. Better than expected results from these stocks may be just what this fund needs to finally breakout.
Energy Select Sector SPDR (NYSE:XLE)
Energy stocks slipped to new six-month lows on Friday and are in danger of breaching key support levels established earlier in the year. XLE tracks 43 large-cap energy names including Exxon Mobiland Chevron.
After peaking in May, XLE has continued to slide lower as crude oil prices once again test their 2015 lows. It will be important to watch how this ETF reacts in the week ahead to the oil inventory report as well as global news headlines.
PowerShares DB U.S. Dollar Index Bullish Fund (NYSE:UUP)
The momentum in the U.S. dollar index has once again turned higher and further strength in this trend will be a factor in global markets. UUP is the largest exchange-traded fund dedicated to tracking the daily price fluctuations of the U.S. dollar versus major foreign currencies.
This ETF has $1.1 billion in total assets and has gained nearly 7 percent in 2015. The strong dollar trend is one of the reasons that currency-hedged ETFs have become so popular for international investors. In addition, a strong dollar may negatively weigh on commodity prices for items such as crude oil and gold.
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