ETF & Mutual Fund Watchlist for July 25, 2018

Strong Alphabet (GOOG) earnings lifted the Nasdaq higher on Tuesday and into the black for the week. The Dow Industrials and Russell 2000 are near short-term resistance levels.

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The financial sector has been rising with long-term interest rates. Stronger economic data has been driving rates higher in July, but the first estimate of second-quarter GDP, due on Friday, will make or break the trend. The economist consensus hit 4.3 percent on Wednesday.

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Healthcare, technology and consumer staples have led the past week’s sector performance.

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Alphabet (GOOG) moved to a new 52-week high over the past two weeks and broke out to upside following earnings. Last week, Microsoft (MSFT) also delivered positive results.

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Biotechnology hit a new 52-week high this week after Biogen (BIIB) beat estimates following promising mid-level trials of a new Alzheimer’s drug that sent the stock close to its 52-week high last week. The overall biotechnology sector also hit a new 52-week high. Amgen (AMGN), AbbVie (ABBV) and Gilead Sciences (GILD) will report earnings this week.

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Friday will be a big earnings day for the energy sector with Exxon (XOM) and Chevron (CVX) reporting. The energy sector remains in a consolidation phase with oil prices. Although natural gas prices have been falling, the natural gas producer ETF is slowly working its way higher as gas prices become more competitive.

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China did not approve Qualcomm’s (QCOM) purchase of NXP Semiconductors (NXPI). Qualcomm (QCOM) will extend the offer or pay a $2 billion breakup fee to NXP. The deal has weighed on both company’s shares since it was announced in November 2016.

Qualcomm is the second-largest holding in iShares PHLX Semiconductor (SOXX) at 8.23 percent of the fund (and only 0.04 percent behind the top holding). VanEck Semiconductor (SMH) has QCOM and NXPI in its top-10. They combine for 9.79 percent of assets.

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Gold and the Japanese yen rallied after the Bank of Japan offered to buy unlimited amounts of government bonds. Interest rates had risen after the market anticipated a policy shift at the BoJ and the bank stepped in to push rates back down. A policy shift is unlikely until at least October.

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The stronger yen pushed the U.S. dollar lower this week.

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The Global Auto ETF (CARZ) fell on Wednesday after General Motors (GM) reported earnings.

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