Consumer Staples Breaking Out to New Highs
by Eric Bush, CFA, Gavekal Capital
While overall developed market stocks remain approximately 7% below May 2015 highs, the consumer staples sector continues to power forward to new highs. The GKCI Developed Markets Consumer Staples Index is now 6% higher than it was in May 2015. The Developed Markets Asia Consumer Staples Index is particularly strong as it is now over 10% higher than it was in May 2015. And these new highs for consumer staples stocks are occurring while consumer discretionary stocks are struggling. The GKCI Developed Markets Consumer Discretionary Index remains about 5% below May 2015 levels. The average DM consumer staple stock is up over 14% since 5/21/2015. Three other sectors have seen the average stock generate positive performance during this time as well. However, consumer staples have outperformed the second best performing sector by nearly 3x during this period.
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