The big winner in the market’s last week was Treasury bonds, as further volatility in stocks led to traders scooping up high quality fixed-income assets. Now the broad-based SPDR S&P 500 ETF SPY will once again face a crossroads when the opening bell rings on the first trading day of June.
The summer months are often characterized by lower volume and heightened volatility, which seems to be a trend that has already established itself this year.
Several important events this week have the potential to impact the market including: personal spending, motor vehicle sales and non-farm payroll data.
Here are the key ETFs to watch for the week of June 1:
Health Care Select Sector SPDR XLV
Healthcare stocks have continued to show tremendous strength this year and XLV has been one of the leading sector components of the S&P 500 Index. This ETF is made up of 57 large-cap stocks in the pharmaceutical, biotechnology and medical services fields. Top holdings include well-known companies such as Johnson & Johnson JNJ and Pfizer Inc PFE.
XLV has gained 9.6 percent so far in 2015 and has recently consolidated near all-time highs. Investors will be watching XLV closely this week to see if it can break out once again and pull the rest of the market along with it.
CurrencyShares Japanese Yen Trust FXY
After appearing to stabilize through the first four months of the year, the Japanese yen currency has once again plunged markedly lower versus the U.S. dollar in May. FXY tracks the daily price movement of the yen versus the U.S. dollar and is down 3.64 percent so far this year.
This latest move has been a tailwind for currency hedged ETFs such as the WisdomTree Japan Hedged Equity Fund DXJ and may continue to fuel demand for Japanese stocks amid central bank quantitative easing measures.
FXY is now sitting near 52-week lows and will likely draw significant interest in the week ahead.
United States Oil Fund LP (ETF) USO
Crude oil prices jumped 4 percent on Friday and managed to recoup the majority of the slide this commodity experienced in May. USO tracks the daily price movement of West Texas Intermediate Light Sweet Crude Oil futures and is the most heavily traded oil ETF.
USO has been working on a significant recovery effort over the last two months and it appears that energy bulls aren’t ready to relinquish the reins quite yet. The summer months tend to be a seasonally strong period for energy prices, which makes this ETF an important indicator of consumer demand.
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