Energy Stocks, Gasoline and TIPS ETFs To Watch This Week

The summer doldrums are off to an early start this year, with the SPDR S&P 500 ETF SPY falling half a percent through the first two weeks of June.   

Despite this slow start, investors will be eagerly focused on the Federal Open Market Committee announcement this week.  This event will precede a scheduled press conference from Fed Chairwoman Janet Yellen on Wednesday and often leads to volatile moves in the market.

Every word from the Fed will likely be poured over to try and deduce the timing of an initial rate hike.  In addition, economic data points such as housing starts and the latest consumer price index will be important to note as well.  

Here are the key ETFs to watch for the week of June 15:

Energy Select Sector SPDR XLE

Energy stocks peaked in early May and have been on a six week slide that has pushed this sector into the red for 2015.  XLE tracks 43 large-cap integrated oil and gas companies that include well-known names such as Exxon Mobil XOM and ConocoPhillips COP.

Despite the stable price action in crude oil, which has been steadily trending sideways, energy stocks have shown weaker relative performance.  This divergence should be monitored, as further declines in XLE could be a drag on the broader market in June.

United States Gasoline Fund UGA

One area of the energy sector that has continued to trend higher has been gasoline prices.  UGA is designed to follow the daily price fluctuations of gasoline futures contracts and recently hit a new 2015 high.  

UGA is up more than 22 percent so far this year and has charted a steady course higher.  This ETF recently broke out above its 200-day moving average, which may be a sign of confidence in gasoline demand ahead of the heavy summer driving season.

iShares TIPS Bond ETF TIP

This week promises to be an interesting juncture for Treasury inflation protected securities, which will contend with the latest Fed statement alongside core CPI data.  TIP is the largest ETF in this space, with $13.5 billion dedicated to 40 inflation protected bonds.

This ETF recently hit a new 52-week low on the back of rising U.S. Treasury Note yields.  However, TIP may be nearing an oversold level and could find additional support if inflationary statistics come in above expectations.