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Consumer Discretionary

Oct 05 2018

Rates Are Already Clobbering Consumer Stocks

  • Oct 5, 2018

“Three steps and a stumble” was the old rule of thumb for timing the impact of Fed tightening on the stock market.

Jul 07 2018

GS Score Sector Rankings With Attractive & Unattractive Rated Industry Groups

  • Jul 7, 2018

Consumer Discretionary can’t be topped; it has held on to the highest-rated spot for seven consecutive months. Utilities and Telecom continue to close out the bottom two. 

Jun 22 2018

Altitudes Are Too High— And Attitudes Are Getting There

  • Jun 22, 2018

An important feature of this bull market—and a reason for its longevity—is the slow recovery in investor attitudes relative to valuation altitudes...

Jun 07 2018

Sector Rankings

  • Jun 7, 2018

Consumer Discretionary has held on to the highest-rated spot for six consecutive months. Coming in last (again) is Utilities. After rating among the lowest two positions between April 2017 and April 2018, Energy finally improved and now sits in 6th place—the middle of the pack.

May 05 2018

Consumer Discretionary Holds At #1

  • May 5, 2018

This year we’ve written several notes surrounding the Consumer Discretionary sector’s prominence among our top Group Selection (GS) Scores. This pattern persisted for a fifth consecutive month in April.

Jan 06 2018

Keep An Eye On “Relative” Inflation

  • Jan 6, 2018

While our Group Selection (GS) framework hasn’t yet warmed up to commodity-oriented industries, our macro work suggests perhaps it should.

Jan 06 2018

Consumer Discretionary Back On Top

  • Jan 6, 2018

Of the 110 industries in our framework, the top seven are all Consumer Discretionary.

Jun 07 2017

A Contrarian “Late-Cycle” Play?

  • Jun 7, 2017

The Amazon Effect masks both the underperformance of the average Discretionary stock and the relative value that’s been reestablished across the sector. “Discretionary ex-Amazon” is a better contrarian pick than Energy.

Apr 07 2017

Retail Fades; Other Consumer Themes Flourish

  • Apr 7, 2017

Shifting consumer preferences and the relentless rise of e-commerce are changing the sector’s beneficiaries of the healthy backdrop away from retail, yet other Discretionary opportunities abound outside of the traditional retail groups.

Jul 08 2016

Discretionary: Is The Top Finally In?

  • Jul 8, 2016

Sector swings have been wild enough thus far in 2016 that Consumer Discretionary’s relative weakness has drawn little commentary.

Aug 07 2015

GS Score Sector Rankings, and Highlighted Attractive Groups

  • Aug 7, 2015

Health Care, Consumer Discretionary, and Financials are the top three rated broad sectors.

Jun 05 2015

Health Care & Consumer Sector Strength Explored

  • Jun 5, 2015

While we view the industry group selection as the most important decision, looking at the sector level rankings also helps us identify broad trends. Here we highlight the top two rated sectors, currently, which also represent a combined >40% weight in our Select Industries Portfolio.

Apr 08 2015

Can Consumer Discretionary Relative Strength Continue?

  • Apr 8, 2015

Despite this sector’s extended outperformance, we think this trend may persist in the near term as Discretionary industry groups look increasingly attractive within our group work. Keeping an eye on the Fed Funds rate is key, however.

Nov 07 2014

New Highs = Neutral

  • Nov 7, 2014

We remain positioned with below-average net equity exposure in tactical portfolios for now. We’re inclined to think there may be more trouble ahead for the stock market.

Aug 07 2014

Automotive Retail Shines In A Dimming Sector

  • Aug 7, 2014

We examine the highly ranked Automotive Retail group and explain why, despite its recent strength, it may still have room to run.

Apr 08 2014

Late March Reversal… And The First Shall Be Last

  • Apr 8, 2014

We examine the impact of March’s strong group leadership reversal on the top and bottom of our group model.

Apr 07 2014

Profit Margins At The Sector Level

  • Apr 7, 2014

All ten of the S&P 500 sectors recorded a sequential increase in four-quarter trailing net profit margins. But consider where sector margins stand today relative to their 25-year medians. Eight of ten S&P 500 sectors are recording profit margins well above their long-term medians.

Feb 07 2014

Consumer Discretionary: End Of The Run?

  • Feb 7, 2014

Last month we suggested the top sector for 2013 would fall from grace in 2014, and the Consumer Discretionary stocks have been quick to cooperate in the last five weeks.

Dec 06 2013

2013 Factor Performance: What Worked? What Will Keep Working?

  • Dec 6, 2013

Momentum and Value worked in 2013. Materials and Financials were the easiest sectors to exploit; Discretionary and Tech the most difficult. Momentum works in December; Value and Small Caps at the start of the year.

Oct 08 2013

Group Models: Info Tech Tops Domestic, Financials Remain Atop Global

  • Oct 8, 2013

Both models have numerous Information Technology and Financials groups in Attractive territory. Neither model has any Unattractive Tech groups. Alternatively, neither model has any Attractive Utilities groups, while several Utilities rate Unattractive in each.

Sep 10 2013

Group Models: Info Tech Tops Domestic, Financials Tops Global

  • Sep 10, 2013

Both models (particularly domestic) have a number of Attractive rated Information Technology groups and no Unattractive rated Tech groups. Financials’ domination of the Global Attractive range continues.

Aug 07 2013

A Comprehensive Look At The Emerging Markets: Diagnosis And Prognosis

  • Aug 7, 2013

We examine Emerging Markets from both the top-down and bottom-up perspectives as we try to identify where to move and what to expect. We check in on two successful EM thematic group ideas as well.

Aug 07 2013

Key Observations On Q2 S&P 1500 Earnings

  • Aug 7, 2013

Year-over-year EPS growth rate for companies with Q2 reports (with about 65% in) currently stands at +4.2%, while revenue growth has come in at a better than expected +2.6%.

Aug 06 2013

The Short Side—Still Ahead YTD

  • Aug 6, 2013

Our AdvantHedge Composite lost 5.9% in July, lagging the inverse performance of the S&P 500 (5.1%), but outpacing both the NASDAQ (6.6%) and the Russell 2000 (7.0%) as the market returned to “risk-on” mode.

Aug 06 2013

Group Models Agree On Energy & Materials

  • Aug 6, 2013

But Information Technology rises to the top of the Domestic model, while the trend of Financials domination in the Global model remains intact.

Jul 12 2013

Domestic and Global Group Models: Strong Agreement On Financials

  • Jul 12, 2013

Our Domestic Scores have five Financials groups rating Attractive; these same five industry groups are Attractive in our Global model. In total, seven Financials groups rank Attractive in the Global model, with insurance groups looking particularly Attractive.

Jul 09 2013

A Contrarian Call For The Second Half

  • Jul 9, 2013

With the notable exception of the Consumer Discretionary sector, cyclical stocks topped out globally on a relative basis in early 2011 (Chart 3). Throughout the last two and one half years, there have been repeated calls for industrial cyclicals—which were, of course, the leaders of the last cyclical bull market—to reassume stock market leadership.

Aug 07 2012

A Look At Thematic And Sector Valuations

  • Aug 7, 2012

Health Care and Consumer Staples valuations don’t look as dangerous as widely assumed. Utilities look expensive; conversely, the big corrections in the Industrials and Materials sectors have yet to create truly compelling valuations. The best sector for contrarians is Energy.

Jun 06 2012

Housing-Related Groups Flock To The Top

  • Jun 6, 2012

The Homefurnishing Retail group was purchased in the Select Industries Portfolio in late May.

May 04 2011

Adding Department Stores: Exploiting The Wealth Effect

  • May 4, 2011

Select Industries portfolio has added new equity group holdings in Department Stores, boosting sector exposure in Consumer Discretionary.

Mar 04 2011

The Consumer Is Reviving… But Sell The Stocks

  • Mar 4, 2011

The game is now over for Discretionary, and this opinion is supported by the sector’s decline to the bottom of our GS Score ten-sector composite.

 

Oct 05 2010

Thoughts On Asia Investing: Performance & Valuation of Consumer Stocks

  • Oct 5, 2010

A look at Asian valuations show China to be fairly valued (neither overvalued nor undervalued), but there are other attractive (cheap) ways to play consumer stocks in Asia.

 

May 04 2010

Is It Too Late To Buy The “Early Cyclicals”?

  • May 4, 2010

One of the great contrary trades in recent memory may well have been the Consumer Discretionary stocks during the last recession and early in the recovery. The consumer had been written off, but these stocks have been the clear market leader. It looks, however, like the move may be running out of steam.

Feb 02 2010

The “New Normal”: Yes, They Ring A Bell At The Bottom

  • Feb 2, 2010

The “New Normal”, just like the late 1990’s “New Era”, will likely fade from popular jargon over time. Counter to “New Normal” reasoning, the Consumer Discretionary sector has demonstrated remarkable performance.

 

Oct 05 2008

Consumer Discretionary....Time To Buy?? Or Is The Devil In The Retails?

  • Oct 5, 2008

While many consumer groups are seeing significant improvement in the GS Scores, careful selection is important as there are still several Discretionary groups rated Unattractive.

 

Apr 05 2008

Consumer Goods Stocks Versus Commodity Stocks: Identifying Long-Term Leadership

  • Apr 5, 2008

Are we asking the wrong question about Consumer Stocks versus Staples? This month’s “Of Special Interest” looks at the relationship between all Consumer groups (both Discretionary and Staples) compared to Commodity related groups.

 

Oct 03 2007

Consumer Watch– Economic Data Weakening, Consumer Stocks Already Discounting A Slowdown

  • Oct 3, 2007

Our view that the consumer is due for a pullback has been bolstered in recent months, as Consumer Discretionary groups have continued to slip in our Group Selection (GS) Score rankings.

Oct 04 2006

Weathering The Strapped Consumer – Introducing New “Strapped Consumer” Theme

  • Oct 4, 2006

While we currently favor little to no allocation to Consumer stocks, we realize that many clients must maintain a substantial weight in the Consumer Discretionary sector. For those clients, we are proposing a new thematic stock market group this month: The Strapped Consumer.

Sep 05 2006

The Demise Of The Consumer

  • Sep 5, 2006

“Of Special Interest” section examines the likely demise of consumer spending power. Taking a lead from the GS Scores and other economic data, we believe that a significant underweight in areas that are particularly sensitive to consumer spending is a prudent strategy for now.

Feb 05 2006

Digging Into Consumer Groups

  • Feb 5, 2006

An analysis of underlying factors that may be hindering the consumer groups, both “discretionary” and “staples,” from making a showing in our Attractive rankings.