(Premium) Consumer Staples Sector Deep Dive – October

Most of the market is off to a strong start in October. Just not the Consumer Staples sector.

Since the S&P 500 bottomed on October 3, it’s risen 3.5%. Over that time 10 of the index’s 11 sectors are up at least 2.4% from their respective lows. Consumer Staples meanwhile, has risen just 0.5%.

And if today’s trading holds, the sector will touch a new year-to-date low.

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What’s Behind the Underperformance of the Average Stock?

How’s the stock market doing this year?

The answer, even more than usual, depends on how you define ‘the stock market’. Is it the Dow? The S&P 500? Perhaps the NYSE Composite?

If the market means the NASDAQ, things look pretty great – that index is up nearly 30% for the year. Dig a little deeper, and the picture isn’t quite so rosy. The Dow Jones Industrial Average and NYSE Composite are barely in positive territory. The small caps are actually down for the year. This is a market defined by the haves and the have-nots.

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The Weekly Grind: October 9, 2023

Week in Review

The S&P 500 rose in the first week of October after 4 consecutive weeks of decline. Another streak also ended last week, when the US Dollar index failed to close higher. The Dollar’s run ended just short of the record set back in 2014. Interest rates, meanwhile, continued to rise, with 30-year Treasury yields briefly surpassing 5%. Crude oil dropped sharply. It’s 9% selloff was the worst since the failure of SVB back in March.

All year, economists have been waiting for the ‘inevitable’ recession that comes with a massive Federal Reserve tightening cycle. Jerome Powell & Co. have raised short-term interest rates by more than 5% since last spring, the fastest pace of hikes since Paul Volcker’s efforts to break the back of inflation in the 1980s. But instead of recession, the US economy keeps on chugging along. The US added 336,000 jobs in September, the best payrolls print since January. That keeps the number of job openings per unemployed worker at roughly 1.5 – far higher than anything the country experienced prior to 2020.

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(Premium) Energy Sector Deep Dive – October

Long-term resistance for the Energy sector has simply been too much to overcome. We’ve been dealing with the 2008 and 2014 highs since last June. At some point, maybe we’ll get the long-awaited breakout. Or we might not. But the risk isn’t really skewed in our favor unless buyers can assert control and push prices to new highs.

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