What happened in the consumer sector: Week of March 5–9
Last week marked the end of earnings season with 99% of companies in the S&P 500 having reported earnings for the fourth quarter of 2017. After an unimpressive performance for the last few weeks, the S&P 500 Index (SPY) revived this week with a gain of 3.5%. This increase was driven by a strong jobs report and better earnings from some consumer stocks last week. All the sectors’ performance also improved this week. The United States added 313,000 jobs last month, outpacing estimates.
Many consumer staples and discretionary companies reported earnings last week. The consumer staples again reported a gain of 1.6%, driven by the stock increase for Monster Beverage (MNST), Altria Group (MO), Constellation Brands (STZ), Kellogg (K), and Campbell Soup (CPB). However, Kroger (KR), Brown-Forman, and Costco (COST) stocks fell after they reported earnings last week.
The consumer discretionary sector also had a positive week, rising 3.0% despite the stock decline for a few companies after they reported earnings. After the earnings results, Dollar Tree (DLTR) and Target (TGT) stocks fell. Wynn Resorts (WYNN), H & R Block (HRB), Leggett & Platt (LEG), TripAdvisor (TRIP), and BorgWarner (BWA) showed tremendous rises in their stock prices last week. According to March 9’s FactSet report, the earnings growth rate for the S&P 500 stood at 14.8% for 4Q17.
Consumer sector–based ETFs’ performance was impressive as well. The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 3.1% while the Consumer Staples Select Sector SPDR ETF (XLP) and the SPDR S&P Retail ETF (XRT) rose 1.6% and 0.31%, respectively.
For 2018, the S&P 500 Consumer Discretionary Index (7.5%) has outperformed the S&P 500 Index (4.2%) and the S&P 500 Consumer Staples Index (loss of 4.5%) on a year-to-date basis.