S&P 500 consumer discretionary sector soars in July

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Yahoo Finance’s Brian Cheung discusses the best performing sectors in the S&P 500 in July.

Video Transcript

BRIAN CHEUNG: Well, time now for our Chart of the Day. And it is August 1, so it’s worth looking back on the scorcher of a July it was, at least in the stock market. On a one month basis, you saw the S&P 500 rise 8%. That was actually an extension of a end of June that actually saw the S&P 500, at least over that six week period, rise by about 12%.

Now, of course, the big question here is who were the winners during that period of time? And if we take a look at a sector basis, a lot of people saying, well, I thought it was Apple that was pulling everyone up. Well, yes, indeed, it was the case that over the one-month period we did see technology companies do very well. Up about 3.5% over the two-month period. But up much more over a one-month period.

But take a look, it was actually consumer discretionary– not big tech– that drove a lot of the gains when you consider it was up about 21% over the last six-week period. On a one-month basis, up 17%.

Who are the stocks in consumer discretionary, Kiko? Amazon, Tesla, Home Depot, Nike. So again, even though we’re talking about, yes, Amazon is certainly a big tech stock, they’re actually classified– as a reminder– as consumer discretionary, not as information technology. But it wasn’t necessarily those big tech names that reported last week that were driving a lot of the gains over the month.

AKIKO FUJITA: Yeah, but this S&P Global note you’re talking about, I mean, also points to the fact that the Fed was a big driver, right? I mean, I guess an important reminder, you know, we hear this, yes, all the time. But it’s like, you know, it’s forward looking. The market is always forward looking. And so what we heard last week, I mean, it felt like it kind of helped drive the gains in the expectation that the Fed’s going to be a little more dovish.

BRIAN CHEUNG: Yeah, and when you take a look– I mean, again, this is one month so it’s not gonna cover the previous Fed meeting where they made the more aggressive move. If we take a look at a two-month basis, you could see that the bottom, around here, what day that? That was June 16. That was when the Fed made that move to the more aggressive 75-basis point move as opposed to the 50-basis point move.

You look at any of these sectors, the bottom is at the same day. Overall, S&P 500, the middle of June. So to that point, the Federal Reserve very much a catalyst for all of this, as they got it very clear to the markets, we’re serious about handling inflation.