NEW YORK (TheStreet) -- Second-quarter earnings could be the catalyst to break the markets out of their narrow trading range, according to one strategist.

"Next quarter's earnings will really move the markets," said Kevin Kelly, chief investment strategist at Recon Capital Partners. "The stronger dollar has been baked in, poor weather has been baked in and now it's time over the summer for companies to execute on their business plans, grow their earnings and not have these excuses."

While second-quarter earnings are expected to fall 4.3% year over year, according to FactSet, corporate profits could rebound once the results are in. That's what occurred during the first quarter. Analysts were forecasting a 4.7% decline but earnings ended up growing 0.1%.

The growth surprise was attributed to rising oil prices and a weakening dollar, two trends taking place in recent months that could continue into second-quarter. Higher oil prices strengthens energy stocks, which account for 4.9% of the S&P 500. A weakening dollar strengthens a company's overseas revenue. 

Prices for West Texas Intermediate crude oil rose 1.7% in just the past month. While the euro gained 3.5% against the dollar.

Kelly said the Federal Reserve's looming move to change its policy and raise interest rates could push stocks lower, specifically within sectors like utilities, real estate investment trusts and consumer discretionary.

"These sectors are trading at higher multiples than their normal averages," he said. "If we do get an increase in rates, we could see their multiples compress from 19 times [the price-to-earnings ratio] to 17 times." Kelly expects the central bank to lift rates higher during its September meeting.

As for finding value in today's market, Kelly stresses the importance of being selective in picking names.

He said Staples (SPLS) and the aforementioned consumer discretionary sector is expensive. "The names that have worked all year are technology and health care," he added. "But you need to be selective, as we saw from Twitter's (TWTR) earnings and Linkedin's (LNKD) earnings," referring to the double-digit declines in shares of both social media names after disappointing financial results.

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