Weak manufacturing and jobs reports are raising concerns about the health of the economic recovery.
“One of the groups that we believe is most vulnerable to the slowdown is the consumer discretionary sector, and more specifically U.S. retailers,” said Russ Koesterich, iShares global chief investment strategist.
“With the possible exception of very high end consumers, consumption is likely to continue to slow with the economy. Retail stocks are not priced for this slowdown, and if anything appear expensive relative to the broader market,” he wrote in a blog. “We therefore maintain our underweight view of this group.”
Retail HOLDRS
