Not a chart fan? Then consider the fundamentals. The Forward P/E for XRT as well as for SPDR S&P 500 Sector Select Consumer Discretionary (XLY) both hover near 19. Of the 9 S&P 500 sectors in the SPDR series, consumer discretionary is the most expensive.
Truth be known, no segment of the economy will thrive in a broad market correction… and we’re certainly due for something with a bit more bite than 5%. That said, with two-thirds to three-fourths of the U.S. economy dependent on household consumption, it’s no wonder that Wall Street is addicted to ultra-low rates; Americans must keep borrowing to eat cake because significant wage growth is unlikely to occur anytime soon.
Gary Gordon is president of Pacific Park Financial, Inc.