Developed market consumer staple stocks are up a health 5.5% in 2016 compared to an 80 bps decline for developed market equities in general. Looking at consumer staples, across a variety of regions, it seems that this group is probably overbought in the short-term. However, the overall trend remains very positive as consumer staples is the only sector that is breaking out to new highs.
84% of DM consumer staple stocks are trading above the 200-day moving average. This is in contrast to just 61% of DM stocks in general that are trading above the 200-day moving average. And in certain weaker sectors of the equity market, such as in financials, only 49% of stocks are trading above the 200-day moving average.
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
The overbought condition exists regardless of which region you look. In DM Americas, 82% of consumer staple stocks are trading above the 200-day moving average. In DM EMEA, this statistics stands at 79% and in DM Asia a whopping 90% of consumer staple stocks are trading above the 200-day moving average.
Nevertheless, as we mentioned early, this an overbought condition in a positive trend. DM Consumer staples have poked out to new all-time highs while the GKCI DM Index remains about 9% below the May 2015 high. Consumer staple stocks are undoubtedly the sector that is leading the market currently.