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James St. Aubin on the Misleading Robustness of Consumer Discretionary Stocks

Even in the face of high prices, it seems impossible to break consumers’ resolve. With the excitement over rate cuts now all but extinguished, investors have yet to come to terms with that strength.

The S&P 500 sub-index of consumer discretionary stocks shows the resiliency. Its gains so far this month are the highest since March. In the just-ended earnings season, the sector reported the second-largest positive (aggregate) difference between actual and estimated earnings. For the year as a whole, Factset forecasts better profit growth than any other sector, bar only information technology. As shown from the chart, the S&P 500 has outperformed the consumer discretionary sector this year, but the relationship is far from broken. What’s good for consumer stocks is good for the market as a whole, and vice versa.

The thoughts and opinions expressed in the article are solely those of the person speaking as of 6/13/2024, and not necessarily those of Sierra and are provided for informational purposes only. Any opinion or estimate contained in this article is made on a general basis and is not to be relied upon by the reader as advice. The reader must make his/her own assessment of the relevance, accuracy, and adequacy of the information contained in this article, and make such independent investigations as he/she may consider necessary or appropriate for the purpose of such assessment.

0136-SI00XCOM 06272024

 

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