Recession fear increases consumer staples investing

Fri, 09/13/2024

by Ellie LeTu

Source: Financial Times

• Consumer staples are a defensive sector

  • Consumer staples will outpace the economy during a recession.

    • Will underperform during periods of economic growth.

  • Used as an indicator of market optimism.

• Stocks like Coca Cola and Colgate-Palmolive on the rise

  • Coca Cola up 20%, Colgate-Palmolive up one third.

  • Walmart and Target have climbed 14.8% and 9.1% respectively.

  • Consumer staples index outperformed S&P500 by 3 times in the past quarter.

• Cracks forming in the economy

  • US labor market starting to struggle.

  • Federal Reserve starting to aggressively cut rates in response.

  • The market continues to tilt towards bond-like defensive stocks.