XLY - XLY Will Continue To Be Fueled By Resilient Consumer Spending In 2024

2024-03-11 07:13:32 ET

Summary

• The U.S. economy had a strong FY23 with low unemployment, lower inflation, and positive real wages, indicating a healthy economy.
• Consumer spending on discretionary products and services remained strong, reflected in the performance of the Consumer Discretionary Select Sector SPDR Fund.
• While long-term trends remain intact, the recent run-up in XLY, combined with seasonal headwinds, suggests limited upside in the short term. A neutral view is justified.

Investment Thesis

The U.S. economy has come off a very strong FY23, surprising many, including me. Unemployment continued to stay low, inflation trended lower, and real wages, after accounting for inflation, proceeded on its expansion path in positive territory. This points to a sustained, healthy economy, which should keep interest rates paused at current levels at most....

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