Our outlook for consumer cyclical stocks

Fed policy uncertainty, the global macro picture and e-commerce competition could curb recent consumer cyclical stock momentum.

R.J. Hottovy, CFA 28 June, 2013 | 10:18PM

Highlights
Uncertainty surrounding Federal Reserve policy and the global macroeconomic picture could derail momentum in consumer cyclical stocks.
Brick-and-mortar retailers are fighting back with price matching, but the margin impact is not sufficiently priced into stocks.
Strong results from home-improvement retailers reinforce the housing market recovery and wide economic moats.

By and large, consumer cyclical stocks have shaken off concerns about lacklustre global economic growth, payroll tax increases and fiscal austerity measures domestic and abroad thus far during 2013. Morningstar's Consumer Cyclical Index has posted a total return of 16.7% for the year to date, nearly 400 basis points ahead of the 12.8% total return for Morningstar's global coverage universe.

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About Author

R.J. Hottovy, CFA

R.J. Hottovy, CFA  R.J. Hottovy, CFA, is a consumer strategist for Morningstar.

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