Will Strong Consumer Data Benefit S&P 500 Select Sector SPDR Fund (XLY and XLP)?

Consumer spending held up even better than expected in July as inflation pressures showed more signs of easing, the Commerce Department reported Thursday.

Advanced retail sales accelerated 1% on the month, according to numbers that are adjusted for seasonality but not inflation. Economists surveyed by Dow Jones had been looking for a 0.3% increase. June sales were revised to a decline of 0.2% after initially being reported as flat.

Excluding auto-related items, sales increased 0.4%, also better than the 0.1% forecast.

But as investors I would be more interested to know how this data and improvement is going to benefit which of the S&P 500 Select Sector?

In this article, I would like to use relative rotation graph (RRG) to help me understand which sectors we can pursue with the improvement in consumer spending?

On 15 August 2024, we have the consumer discretionary led the S&P 500 sectors with a +3.38% gain, and consumer staples was among the Top 5 with close to 1% gain (+0.99%).

But this does not show us whether these sector would continue to lead or improving?

These 2 sectors could be benefitting from the strong consumer data that was released on Thursday (15 August), so we might see that both these 2 sectors could move to leading.

The more probable one would be the Consumer Discretionary sector, as seen in the chart below, XLY is moving closer to the leading quadrant.

But this might depend on a few factors like earnings release from stocks in the XLY sector.

This indicator might give us another technical analysis view to compare the sector against the benchmark S&P 500.

Appreciate if you could share your thoughts in the comment section whether you think RRG is helpful to help to visually compare the performance and momentum of S&P 500 select sectors against the S&P 500.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.