Consumer discretionary stocks are doing fine. McDonald's example
Hi everyone,
As millions of retail crypto and options speculators lose their savings, McDonalds Corporation is rubbing its hands with a hideos grin. "Ah, yes, millions of fresh employees, just what I need".
In all seriousness, consumer discretionary sector as a whole was obviously contracting with the broad market. However, not quite at the same pace.
MCD
stock has seen a maximmum drawdown of 8.7%, whereas S&P dropped 12% from the top.
Though if you look for a safehaven amidst the increased volatility, it is much safer to buy consumer defensive names, such as Campbell Soup (
CPB
), Kroger
KR
, Procter&Gamble (
PG
), etc.
All these names performed really well this month compared to the general market.
McDonald's is a cyclical consumer stock, which means it will outperform the market during the economic expansion period.
And when is this going to happen?
My opinion is the following:
1. Market is in turmoil, so the Fed is not going to raise rates.
2. Inflation will slow down. Inflation is connected to the supply chain issues, not to the Fed printing money (because in reality they did not print anything, but that's another topic for discussion).
3. All Covid measures are going to be cancelled this year, as the global context on taming this virus started to shift.
The above reasons lead to a major economic expansion and another consumer discretionary stocks boom later this year.
McDonalds happens to be one of them.
Oh, yeah, also check my levels on the chart.
As always, trade wisely and good luck!
-----------------------------------------------------------------------------------------------------------------
Disclaimer!!!
This is not financial advise.
As millions of retail crypto and options speculators lose their savings, McDonalds Corporation is rubbing its hands with a hideos grin. "Ah, yes, millions of fresh employees, just what I need".
In all seriousness, consumer discretionary sector as a whole was obviously contracting with the broad market. However, not quite at the same pace.
MCD
stock has seen a maximmum drawdown of 8.7%, whereas S&P dropped 12% from the top. Though if you look for a safehaven amidst the increased volatility, it is much safer to buy consumer defensive names, such as Campbell Soup (
CPB
), Kroger
KR
, Procter&Gamble (
PG
), etc. All these names performed really well this month compared to the general market.
McDonald's is a cyclical consumer stock, which means it will outperform the market during the economic expansion period.
And when is this going to happen?
My opinion is the following:
1. Market is in turmoil, so the Fed is not going to raise rates.
2. Inflation will slow down. Inflation is connected to the supply chain issues, not to the Fed printing money (because in reality they did not print anything, but that's another topic for discussion).
3. All Covid measures are going to be cancelled this year, as the global context on taming this virus started to shift.
The above reasons lead to a major economic expansion and another consumer discretionary stocks boom later this year.
McDonalds happens to be one of them.
Oh, yeah, also check my levels on the chart.
As always, trade wisely and good luck!
-----------------------------------------------------------------------------------------------------------------
Disclaimer!!!
This is not financial advise.
