Consumer Staples Stocks Have Underperformed Lately, But They're Hot Today

While tech stocks are falling Wednesday, user staples are connected nan rise. 

The S&P 500’s consumer staples assemblage was up 1.5%, making it nan benchmark index’s champion performer connected a time erstwhile nan broader scale and nan tech-focused Nasdaq Composite were successful retreat.

The moves lifted shares of companies including nutrient makers General Mills (GIS), Conagra Brands (CAG), J.M. Smucker (SJM) and Kellanova (K). Nearly each of nan sector’s components were precocious successful nan green, pinch a fewer retailers among nan exceptions. General Mills was up astir 4%, making it 1 of nan S&P 500's apical gainers.

Why Are Consumer Staple Stocks Up?

Concerns astir nan wellness of nan U.S. user person weighed connected staples companies lately.

PepsiCo (PEP) precocious offered a informing that shoppers were getting much “value-conscious,” while Pringles shaper Kellanova cited “challenging” economical conditions. The caller comments bespeak immoderate of their merchandise lines whitethorn beryllium nether unit from white-label alternatives. But nan stocks are besides seen arsenic imaginable hedges against economical weakness.

Investors whitethorn besides beryllium attracted to nan assemblage arsenic they look for stocks that person lately underperformed.

The assemblage roseate 8% successful nan first half, according to S&P Dow Jones Indices data, lagging exertion and communications services stocks. Respondents to Bank of America’s latest monthly fund head survey said they person lately accrued their allocation to staples shares while pulling backmost connected discretionary stocks.