Staples Struggle: Normally Dependable ETFs Wilting in 2014

“The long and the short of the current environment may be that U.S. companies, particularly consumer-oriented corporations, may not be able to increase their profit margins by charging more for products. That leaves cost-cutting and share buybacks as the primary ticket for ‘goosing’ results until employment gains translate into wage gains,” writes Gary Gordon.

Then there is the technical damage. XLP and VDC are barely above their 200-day moving averages. Of XLP’s top-10 holdings, only CVS Caremark (NYSE: CVS), Colgate-Palmolive (NYSE: CL), Mondelez (NasdaqGM: MDLZ) and Walgreen (NYSE: MDLZ) are above their 200-day lines and Colgate-Palmolive looks ready to violate that line soon. XLP’s top-10 holdings represent nearly two-thirds of the ETF’s weight.

Consumer Staples Select Sector SPDR