Staples Dilemma:
Looking over the consumer staples space overall, the group via the XLP on a YTD basis is now the 10th best of 11 major S&P sectors. The ETF is still higher by more than 6%, and besting the 2021 advance in technology thus far (XLK up 4.5%). But the group has a certain stigma attached to it, that it is boring, defensive, and for older market participants. One would say with both of the aforementioned groups, should I rather start picking away at tech or food? Good question. The XLP has recorded 3 straight very taut WEEKLY closes, within just .24 of each other the weeks ending between 4/16-30, and moves from that type of digestion can be very powerful. The other side of that argument is that this group traditionally trades in a very tight manner. Either way, we are individual stock pickers here but do understand that the vast majority of a stock’s return emanates from its sector. Today we will take a peek at some staples we like, and some we do not. It is a bifurcated space where alcohol and tobacco have flourished, and soft drinks and nondurable household products have weighed.