Consumer Discretionary

The Consumer Discretionary Sector encompasses those industries that tend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods, textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, media production and services, and consumer retailing and services.

Last % Change Market Cap Market Weight Weighting Recommendations
S&P Capital IQ Ned Davis Research (PDF)
+0.10% $4.14T 12.07% Overweight 1%
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Sector Commentary from Standard & Poor's

S&P Capital IQ recommends overweighting the S&P 500 Consumer Discretionary sector. Year to date through April 3, 2014, the S&P 500 Consumer Discretionary Index, which represented 12.1% of the S&P 500 Index, was down 1.7% in price, compared with a 2.2% gain for the S&P 500. In 2013, this sector index rose 41.0%, versus a price advance of 29.6% for the 500. There are 32 sub-industry indices in this sector. Movies & Entertainment is the largest, representing 14.3% of the sector's market value, while Education Services is the smallest, accounting for 0.2% of the sector.
The cap-weighted average of this sector's component company S&P Capital IQ STARS (Stock Appreciation Ranking System) is 3.5, as compared with a cap-weighted average of 3.5 for the S&P 500. The sub-industries within this sector that currently show the highest average STARS are Broadcasting at 4.7, Automobile Manufacturers at 4.4, and Hotels, Resorts & Cruise Lines at 4.1. Those with the lowest average STARS are Automotive Retail at 2.8, Department Stores, at 2.7, Internet Retail at 2.5. According to Capital IQ, the sector is projected to record a 13.5% year-over-year increase in operating earnings per share in 2014, as compared with the S&P 500's estimated EPS growth of 7.5%. During 2013, this sector posted a 12.1% advance in EPS, versus an increase of 5.9% for the S&P 500. The sector's price-to-earnings ratio of 18.7X, based on consensus 2014 operating EPS estimates, is above the S&P 500's forward P/E of 16.0X. Capital IQ also reports that the consensus long-term EPS growth estimate for this sector is 16.9% versus the S&P 500's 12.0%, giving the sector a P/E-to-projected EPS growth rate (PEG) ratio of 1.1X, which is below the broader market's PEG of 1.3X. Finally, this sector pays a dividend yield of 1.5%, as compared with the yield of 2.0% for the S&P 500.
S&P Capital IQ's proprietary technical indicator for this sector currently shows a negative reading. In researching the past market history of prices and trading volume for each company, S&P Capital IQ's computer models apply special technical methods and formulas to identify and project price trends for the sector.

Marketweight

Understanding Weighting Recommendations

Sector weighting recommendations are provided by independent, third-party research firms to help further refine your analysis.

Some sectors get "over," "market," or "under" weighted, which means that the research firm recommends that more, the same, or less of the sector should be held in your portfolio than is held in the market.

Learn more about the average recommendation holding period and methodology of the research firms:

View weighting recommendations for all sectors

Performance

U.S. Sectors & Industries Performance is represented by the S&P 500 GICS® (Global Industry Classification Standard) indices. Last % change is the nominal change in the price of the index from the previous trading day's close expressed as a percentage as of the index value at the time noted in the Date & Time field. All dates and times are reported in ET.

Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol. Chart Performance figures may vary slightly from 1 Year % Change due to different timeframes used in chart calculations.

GICS is an industry classification system developed by Standard & Poor's in collaboration with Morgan Stanley Capital International (MSCI). S&P uses GICS to determine the market segment to which a company is assigned. A company is assigned to a single GICS industry according to the definition of its principal business activity as determined by Standard & Poor's and MSCI. Revenues are a significant factor in defining principal business activity; however, earnings analysis and market perception are also important criteria for classification. There are currently 10 sectors and 68 industries. Three of the 68 industries do not have companies represented in the S&P 500 Index; therefore, performance is not available for Marine, Transportation and Infrastructure, and Water Utilities.

Standard & Poor's 500 (S&P 500) Index is an unmanaged market-weighted index of 500 of the nation's largest stocks from a broad variety of industries. The S&P 500 represents about 80% of the total market value of all stocks on the New York Stock Exchange. Market-weighted means that component stocks are weighted according to the total value of their outstanding shares.

Indexes are unmanaged, statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lower performance. It is not possible to invest directly in an index.

Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol.

Market Cap is the sum of the market value of each company assigned to the applicable GICS sector or industry. Market value or capitalization is calculated by multiplying the number of common shares outstanding by the market price per share at the end of each trading day.

Market Weight is updated weekly from S&P Capital IQ and represents the sum of the market cap of the companies in the applicable S&P 500 GIC sector index as a percentage of the total S&P 500 Index market capitalization.

Fundamental data is the cap weighted average (or industry standard method) of the most current value available at the end of each trading day for each company assigned to the applicable GICS sector or industry.

S&P Capital IQ Industry Surveys

These reports provide deep analysis of industry dynamics, and the environment facing participating companies.

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Past performance is no guarantee of future results.