“The U.S. economy is the global economic driver. And within the U.S. economy, the U.S. consumer is the global driver.” James P. Gorman

We’re Entering In Negative Territory for 2018

The stock market (measured via the S&P 500 and Dow Jones Industrial Average) has officially erased all of its 2018 gains. I can see from the headlines like the one pictured below from The Drudge Report that there’s certainly starting to be a bit of panic in the air.

The Parts of the Machine Matter

One of the beneficiaries of this year’s market rise was the Consumer Discretionary Sector ETF, XLY as it still remains above its 2018 low near 98 with a price currently near 101. The main reason for XLY’s rise was due to Amazon’s 23.15% weighting in the ETF and the fact that even with the recent downturn in AMZN it is still well above its 2018 low. You can see below that AMZN dwarfs its nearest XLY weighted fellow component, HD (10.6%), by over 2 to 1. Behind HD nothing comes close in terms of comparable influence upon XLY.