ETF has shown strong outperformance of defensive stocks when compared with discretionary/cyclical stocks since January, 2022. However, this relationship has started to reverse course. The ratio is now down more than 14 per cent since posting a 52-week high on Dec 17. Although the trend remains up, favouring consumer staples/defensive stocks, the Consumer Discretionary Select Sector SPDR Fund is the top-performing sector over the past week, with a gain of 6.53 per cent.
Next we screened for companies that are indicating a price/earnings ratio no higher than 15. The average P/E of the S&P 500 consumer discretionary sector index is 29.