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How the Consumer Sector Is Faring amid the Trade War

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What went down in the consumer sector: June 18–22

With the start of Q2 2018 earnings season, the S&P 500 Index saw an average week with trade war tensions looming over the market. The S&P 500 Index (SPY) declined 0.89% for the week ended June 22. Most of the sectors in the index reported unimpressive performance last week, as the chart below shows.

The consumer staples sector didn’t enjoy much gain last week. On the other hand, the consumer discretionary sector suffered the previous week after automaker stocks declined. President Trump threatened to impose a 20% tariff on European cars in response to the European Union’s decision to impose 25% tariffs on more than 3 billion in European goods. The European Union decided to retaliate against the Trump administration’s US tariffs on steel and aluminum.

The consumer staples sector reported a small gain of 0.05% while the consumer discretionary sector declined 0.70%. Kroger Company (KR), Darden Restaurants (DRI), and Carmax (KMX) enjoyed substantial gains after their earnings report last week.

As per a June 15 Factset report, the blended earnings growth rate for the S&P 500 for Q2 2018 stands at 19.0%.

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Consumer sector ETFs performance last week

Consumer sector ETFs had a good week except for the discretionary sector ETF. The SPDR S&P Retail ETF (XRT) was the second-highest gainer with 2.1% increase last week. While the Consumer Staples Select Sector SPDR ETF (XLP) rose 0.17%, the Consumer Discretionary Select Sector SPDR Fund (XLY) declined 0.70%.

Indexes’ impressive performance last week

For 2018, the S&P 500 Consumer Discretionary Index (12.9%) has outperformed the S&P 500 Index (3.04%) and the S&P 500 Consumer Staples Index (-9.7%) on a year-to-date basis.

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