(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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(Premium) Consumer Staples Sector Deep Dive – September

If we’re going to see the Consumer Staples bounce, it’ll need to start with an improvement in breadth.

Today, nearly three-quarters of the sector’s constituents are in long-term technical downtrends, while the other quarter remain in technical uptrends. But things are deteriorating on a short-term basis, where just 1 in 10 are in short-term technical uptrends.

The sector will need to turn things around in short order if it’s to have any hope of riding a fourth quarter rally.

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(Premium) Consumer Staples Sector Deep Dive – August

Stocks are in the midst of their largest selloff since March, so you might expect to see risk-off sectors catching a bid. Unfortunately, they aren’t getting much of one at all.

The Consumer Staples entered the month near the high end of a two-year trading range, but now they find themselves back below a 200-day moving average price and knocking on the door of two-month lows.

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(Premium) Consumer Staples Sector Deep Dive – July

It seems like an eternity ago, but Consumer Staples were the belle of the ball in December 2022. The sector was breaking out to 30-month highs relative the rest of the S&P 500, and that reign looked set to continue with a presumed recession on the horizon.

Then came January.

That breakout became a failed move, which sparked a steep selloff and, ultimately, a full-fledged trend reversal. Now Consumer Staples is at multi-year relative lows.

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(Premium) Consumer Staples Sector Update – June

If a bear market is defined as a 20% drawdown, then the Consumer Staples sector managed to avoid the bear entirely in 2022. While the S&P 500 peaked in January of last year before embarking on a steep 25% decline, the Staples managed to keep climbing until April. They were also leaders out of the October lows, climbing 15% by the end of November and getting within 5% of new all-time highs. The S&P 500, for context, still hasn’t gotten that close to its own former highs.

Since that November peak, though, Staples have been completely left behind by the rally. The sector isn’t in a downtrend – it’s above its 200-day average and has set two higher lows since the October bottom – but it’s not in an uptrend either. Their January 2022 highs have been stiff resistance for more than a year.

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(Premium) April Consumer Staples Outlook

During bear markets, Consumer Staples tend to outperform. That’s what we saw all throughout 2022. Just a few short days into the new year, though, Staples failed to hold relative support, and subsequently gave up a year’s worth of outperformance in about a month’s time.

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(Premium) February Consumer Staples Outlook

We reduced our rating of Consumer Staples to equalweight earlier this month, when it became clear that its bullish resolution had turned into a failed breakout. Like we said, from failed moves come fast moves in the opposite direction. Staples are below their 200-day moving average relative to the S&P 500 for the first time in a year.

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