With the Christmas season coming up, it seems like an appropriate time to look at the retail sector. Prophet.net is a great website for industry charts. The charts below are from the site.
The sectors that are doing well are the conservative sectors -- areas of the retail environment that provide necessary goods and are therefore somewhat more resistant to a recession.
Grocery stores have rallied off a mid-August low and are now above the 200 day SMA.
Drug stores haven't done much since early May. While they didn't participate in the last part of the S&P rally, they were also somewhat immune to the mid-summer sell-off.
Electronic stores are near their highs for the year. My guess is traders are expecting a new group of "must have" electronics for the Christmas season. I'm guessing the IPhone also helps out here.
Discount stores tried to rally above the 200 day SMA, but they just didn't have the juice to stay above that crucial line. That is interesting because if the economy were slowing down these stores would be a natural beneficiary of a pinched consumer.
Department stores are near their lows for the year. Traders are obviously concerned about the consumer's ability to continue shopping here.
Apparel stores are also near their lows. This ties into traders concern about the consumers ability to continue spending on clothes in the current economic environment.
Auto stores are also hear their lows.
The Mail Order Business has bounced off its lows, but is still in bearish territory.
Home improvement and home furnishings are obviously impacted by the housing slowdown.
Out of 10 retail sectors, 6 are below their respective 200 day SMAs. Several are near their lows for the year. Two of the sectors that are doing well are recession resistant and one is dependent on the next cool thing. This tells us one very important thing about what the market is thinking: they are betting against the US consumer right now.