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Consumer Sector Insights for the Week of October 2–6, 2017

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Market and consumer sector’s performance last week

With the start of the third quarter earnings season, the S&P 500 Index (SPY) (SPX-INDEX) finished the week ending October 6, 2017, with positive growth of 1.2%. The consumer staples sector fell 0.29% last week led by Costco Wholesale’s (COST) shares, which fell after a dip in its fiscal 4Q17 gross margin.

Pharmaceutical companies like CVS Health (CVS) and Walgreens Boots Alliance (WBA) dragged down the S&P 500 Index after CNBC’s report about Amazon’s (AMZN) entry into online drug sales.

The consumer discretionary sector rose 1.8% last week due to an increase in General Motors (GM), Lennar (LEN), and Priceline’s (PCLN) stock prices.

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Other events that drove the market last week

September jobs data released by the U.S. Bureau of Labor Statistics on October 6 also drove the market last week. Impacted by Hurricane Harvey and Hurricane Irma, non-farm payrolls fell by 33,000 in September—way below economists’ estimates of an addition of 85,000 jobs. On the brighter side, the unemployment rate fell to 4.2% from 4.4% and wages rose 0.5% to an average of $26.55 an hour.

Consumer sector–based ETFs were average in the week ending October 6. The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 1.8% last week. The SPDR S&P Retail ETF (XRT) fell 0.29%, while the Consumer Staples Select Sector SPDR ETF (XLP) fell 0.31%, respectively.

As of October 6, the S&P 500 Index (13.9%) has outperformed the S&P 500 Consumer Discretionary Index (12.7%) and the S&P 500 Consumer Staples Index (4.1%) on a year-to-date basis.

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