Prepared for you by Randy Dunham
September 30, 2026
THE PRINT
The equal-weight consumer discretionary sector is making all-time lows relative to the equal-weight S&P 500.
THE CHART(S) / DATA
Note: This chart uses data from Yahoo Finance. Other vendors, such as TradingView, show that the ratio is not at all-time lows.
The equal-weight consumer discretionary sector is making new all-time lows relative to the equal-weight S&P 500. The ratio is even lower than it was in 2008.
I prefer equal-weighted ETFs over cap-weighted ETFs (XLY/SPY) because, in my opinion, they give a better picture of the average stock in the sector without letting a handful of large companies influence the results.
Regardless of the data vendor, the broader message is the same: consumer discretionary stocks are underperforming.
Here are the YTD returns for five of the largest U.S. consumer discretionary stocks:
Amazon (AMZN): +6.87%
Tesla (TSLA): -21.54%
Home Depot (HD): -16.29$
McDonald’s (MCD): -23.44%
TJX Companies (TJX): -12.90%
Most of these stocks are down considerably this year. Much of that weakness may be tied to rising oil prices.
Oil affects nearly every part of the U.S. economy. Higher oil prices raise costs for consumers and businesses. They also make shipping goods more expensive.
When costs rise, consumers pull back on nonessentials. That means less spending on things like retail shopping, dining out, and vacations — the type of activities that make up the consumer discretionary sector.
Takeaway: Some may argue that the risk/reward in consumer discretionary is attractive but elevated oil prices remain a major headwind. However, a decline in oil prices could provide the sector with a much-needed catalyst.
THE TAPE
THE HIGHS AND LOWS
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Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.