XLP has been unable to weather the recent rout in U.S. stocks as the ETF is off 1.7% over the past week, betraying its reputation as one of the best performers among the nine sector SPDRs during the months of August and September. [August Sector Ideas]
“Margins appear to be getting squeezed this year, and the strong USD isn’t helping things by acting as a headwind to revenue growth from abroad, resulting in a forecast decline in EPS this year. Estimates for next year look better. In any case Consumer Staples stocks have seen their P/E multiples expand considerably over the last five years. As a result these stocks appear rather expensive, and Staples has an UNDERWEIGHT recommendation,” according to AltaVista.
Consumer Staples Select Sector SPDR
