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Although the S&P 500 index is up 7.04% for the year (through yesterday's close), consumer-related shares have not kept pace.
For instance, the consumer discretionary sector (which has an equivalent exchange-traded fund, or ETF (AMEX: XLP)), has gained just 1.07% since the end of December, a difference of more than six percentage points. Given the meltdowns in the housing market and the subprime finance sector, the disparity is not all that surprising.
However, the consumer staples sector (which has an equivalent exchange-traded fund, or ETF (AMEX: XLY)), has also lagged the broad market. It is up 4.55% year-to-date, a performance gap of more than one-and-a-half percentage points.
Despite reassurances to the contrary from economists, pundits, and policymakers, it would seem that investors are anticipating an across-the-board slowdown in consumer spending.
Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.
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