The S&P 500 Consumer Discretionary sector is often thought of as a bellwether for measuring the overall health of the economy. In a recent survey, this sector was found to be the best performing sector within the S&P 500 over the past 12 months.
Consumer discretionary spending is defined as spending that is not essential, but driven by personal preferences and decisions. It accounts for non-essential goods and services such as entertainment, apparel, travel, leisure activities, and more.
The strength of the Consumer Discretionary sector is due in part to the current macro environment. Low interest rates, an improving labor market, and elevated consumer confidence, have all helped to support growth in the sector. Also, recent tax reforms have put additional funds into the hands of consumers, allowing them to make more discretionary purchases.
It is not surprising that the biggest companies within the S&P 500 Consumer Discretionary sector are retailers. Department stores, online retailers, home improvement stores, apparel companies, and restaurants have all seen their share of success. These types of companies have benefited from increased consumer spending and the ubiquity of online shopping.
The Consumer Discretionary sector also includes certain media and entertainment companies. Companies that provide streaming content and produce motion pictures have benefited from increased demand for streaming services. Video game developers have also seen a lift in their share of the market due to the release of several blockbuster games.
In terms of broader market performance, the S&P 500 Consumer Discretionary sector has been a leader. Year-to-date, the sector has gained over 10%, performing better than the S&P 500 as a whole. This strength has been seen across countries with the U.S., U.K., and Japan all being important markets for the sector.
Overall, the S&P 500 Consumer Discretionary sector appears poised to continue its outperformance in the months ahead. Low interest rates, an improving labor market, and recent tax reforms have all helped to bolster consumer confidence and discretionary spending. If the broader economy continues to expand, the sector should benefit from an uptick in consumer spending.
The S&P 500 Consumer Discretionary sector is often thought of as a bellwether for measuring the overall health of the economy. In a recent survey, this sector was found to be the best performing sector within the S&P 500 over the past 12 months.
Consumer discretionary spending is defined as spending that is not essential, but driven by personal preferences and decisions. It accounts for non-essential goods and services such as entertainment, apparel, travel, leisure activities, and more.
The strength of the Consumer Discretionary sector is due in part to the current macro environment. Low interest rates, an improving labor market, and elevated consumer confidence, have all helped to support growth in the sector. Also, recent tax reforms have put additional funds into the hands of consumers, allowing them to make more discretionary purchases.
It is not surprising that the biggest companies within the S&P 500 Consumer Discretionary sector are retailers. Department stores, online retailers, home improvement stores, apparel companies, and restaurants have all seen their share of success. These types of companies have benefited from increased consumer spending and the ubiquity of online shopping.
The Consumer Discretionary sector also includes certain media and entertainment companies. Companies that provide streaming content and produce motion pictures have benefited from increased demand for streaming services. Video game developers have also seen a lift in their share of the market due to the release of several blockbuster games.
In terms of broader market performance, the S&P 500 Consumer Discretionary sector has been a leader. Year-to-date, the sector has gained over 10%, performing better than the S&P 500 as a whole. This strength has been seen across countries with the U.S., U.K., and Japan all being important markets for the sector.
Overall, the S&P 500 Consumer Discretionary sector appears poised to continue its outperformance in the months ahead. Low interest rates, an improving labor market, and recent tax reforms have all helped to bolster consumer confidence and discretionary spending. If the broader economy continues to expand, the sector should benefit from an uptick in consumer spending.
