iPhone over Toilet Paper

Igor Manukhov - Jun 30, 2023

Consumer Discretionary stocks continue to outperform Consumer Staples. This is a positive sign for the bull market.

After a brief pullback, markets found support around 4300. Looking through some of the secondary market indicators, I noticed that consumer discretionary stocks (Apple Computers etc.) have been gaining strength against consumer staples stocks (Johnson and Johnson for example).

The chart below shows the historical relative strength line (black line) of discretionary stocks vs. staples stocks. A rising line indicated that discretionary stocks are doing better, while a falling line suggests that staples stocks are doing better. When markets are rising people prefer iPhones over toilet paper. There will be more uncertainty ahead and no bull market ever goes up in a straight line, but this is just one more piece of evidence pointing to strength in the emerging bull market.