Key Consumer Sector Insights

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.

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

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.

Consumer Sector Overview: August 28–September 1, 2017 PART 2 OF 6

Analyzing the Consumer Sector’s Performance Last Week

Index performance last week

As of September 1, the S&P 500 Index (10.6%) (SPY) (SPX-Index) has outperformed the S&P 500 Consumer Discretionary Index (10.4%) (XLY) and the S&P 500 Consumer Staples Index (6.1%) (XLP) on a YTD (year-to-date) basis.

Analyzing the Consumer Sector’s Performance Last Week

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Key updates

On September 1, General Motors (GM) released its August sales report. In August, US retail sales recorded 275,552 vehicles—7.5% higher YoY (year-over-year). The company’s commercial sales have risen 19% YoY. General Motors gained domestic commercial market share for 13 consecutive months. Its commercial market share was driven by strong crossover sales at all four of the company’s brands. General Motors stock rose ~5.0% last week.

On September 1, Ford (F) released its sales results for August. The company’s overall sales fell 2.1% to 209,897 vehicles in August. It was mainly impacted by lower fleet sales, which fell 0.2%. Ford’s retail sales for August fell 2.7% to 164,067 vehicles. Its stock rose ~5.0% in the week ending September 1.

L Brands (LB) released its August 2017 sales report on August 31. Its net sales for the four weeks ending August 26, 2017, fell 1.0% YoY to $842.1 million. Its comparable sales also fell 4.0% in August. The company’s exit from the swim and apparel categories impacted comparable store sales for Victoria’s Secret by three percentage points and overall sales by two percentage points. As of September 1, the stock rose 2.4% last week.

[“Source-Market Realist”]