Chris Verrone: Consumer Discretionary Stocks Poised for Bull Run

Consumer Discretionary Strength

• 🚀 Consumer discretionary sectors are showing signs of a significant bullish run, acting as market leadership.
• 📈 On an equally weighted basis, consumer discretionary is making new cycle highs, outperforming staples.
• 💡 This trend is supported by positive internal market indications, with about 40% of the Russell 2000 making 20-day highs.

Housing Market Indicators

• 🏠 Homebuilders, including Dr. Horton and Toll Brothers, are showing strong upward momentum, breaking through their 200-day moving averages.
• 📉 This strength in homebuilders is occurring as mortgage rates are breaking down, providing a supportive backdrop.
• 🏘️ Many smaller homebuilders within the Russell 2000 are also participating in this rally.

Market Momentum and Rate Cuts

• 📊 Despite potential headwinds like tariffs or a weaker labor market, the market appears to be ignoring these factors.
• ⚡ The momentum in consumer discretionary stocks is strong, making it difficult to bet against.
• ❓ A question is raised about whether the actual rate cut will be the catalyst for further stock movement or if the move is already happening in anticipation.