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Key Consumer Sector Insights for August 28–September 1, 2017

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Market and consumer sector’s performance last week

The second quarter earnings season ended on a productive note. The S&P 500 Index (SPY) (SPX-INDEX) finished the week ending September 1 on a positive note with a 1.4% gain. Brown-Forman stock rose last week and benefited the consumer staples sector with its strong 1Q18 results. On the other hand, Campbell Soup stock (CPB) pulled down the staples sector. Its earnings and revenues missed its fiscal 4Q17 results. Overall, the S&P 500 Consumer Staples Index rose 0.51% last week.

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In the consumer discretionary sector, Best Buy (BBY), H&R Block (HRB), and Dollar General (DG) fell last week after their earnings results. However, automakers General Motors (GM) and Ford (F) rose. Their August sales results benefited the sector. The S&P 500 Consumer Discretionary Index rose 1.6% last week.

Other events last week that impacted the market included the US August jobs report on Friday. The United States Department of Labor said that the US economy added 156,000 jobs in August—lower than economists’ expectations of 180,000 jobs. The unemployment rate in the US rose to 4.4% from 4.3%. Average hourly wages rose 2.5% in the past 12 months. The disappointing jobs report might reduce the chances of another Fed rate hike this year. The jobs report had a subdued impact on the S&P 500 because automakers’ stock rose.

Consumer ETFs were productive last week. The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 1.6% on a weekly basis—the highest among consumer ETFs. The SPDR S&P Retail ETF (XRT) rose 1.0% and the Consumer Staples Select Sector SPDR ETF (XLP) rose 0.55% last week.

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