Capital IQ also argues that investors should stay invested in equities as currency pressures moderate ahead – the depreciating U.S. dollar will help bolster U.S. companies’ revenues from overseas markets. According to Capital IQ, third and fourth quarter 2016 growth is expected to be 6.3% and 9.7%, respectively.
S&P Global Market Intelligence equity analyst Joseph Agnese also projects revenue growth will be sustained by improved pricing power as companies expand market and R&D budgets. Additionally, cheaper commodity costs and increasing efficiency will help support operating margin expansion.
The consumer sector is currently one of the better performing areas of the market. XLP increased 4.1% year-to-date while the S&P 500 rose 1.7%. The ETF is also trading above its 50-day and 200-day simple moving averages.
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Consumer Staples Select SPDR