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Consumer Staples Didn’t Fall into Equity Market’s Downtrend

Renee Blakely

New Lows for Oil Dragged SPY and EWU Down

(Continued from Prior Part)

Consumer staples managed 0.3% gains

The Consumer Staples Select Sector SPDR ETF (XLP) rose 0.3% on December 7 while many other component sectors of the SPDR S&P 500 ETF (SPY) were hit by the plunge in oil prices. Of the many stocks from the consumer staples sector, Keurig Green Mountain (GMCR) jumped 71.9% on the day. We will look at its stock price movement later in the series. The following graph shows some of the consumer staple stocks along with their respective moving averages.

The consumer staples sector

  • The consumer staples sector consists of food retail, packaged food, household products, and personal care products.
  • Consumer staples are called “defensive stocks” just like the utility sector because these stocks generally tend to remain stable during various phases of the business cycle. Thus, the beta value of these stocks is less than one. A beta value less than one implies that the stock is less sensitive to broad market movement.
  • An exception to the above beta value is Avon Products (AVP). The stock is very volatile as compared to its peers. Thus, it earned a beta of 1.7. Read Avon Products Blasts off on December 4 for more information.
  • The average trailing-one-month return of the stocks from the above table is 13.9% while the average trailing-past-week return is 12.0%.
  • The above stocks traded at prices above their respective moving averages. The average trading price of these stocks is $81.07. The average values for 100-day, 50-day, and 20-day moving averages are $74, $74, and $75, respectively. This suggests an uptrend in the price movement of these consumer staples stocks.
  • The analysts’ stock price target is greater than the trading prices of stocks like Avon Products (AVP), Kroger (KR), Kimberly-Clark (KMB), General Mills (GIS), Procter & Gamble (PG), JM Smucker (SJM), and Estee Lauder (EL). The average growth potential of these stocks is 5%.

Now let’s also look into the key stocks of the SPDR S&P 500 ETF (SPY) as of December 7.

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