Markets

Where to shop for consumer stocks

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Economic growth is humming and consumer confidence in the U.S. and Europe is at its highest level since the global financial crisis. Yet buyers of consumer stocks have good reason to be discerning when shopping for their exposure. Imposed and threatened tariffs are combining with disruptive market-related forces to blur the outlook for consumer stocks, as we write in our new Global equity outlook Buyer beware: Shop around for consumer stocks . An upbeat view of the economy, a willingness to spend and growing income in major developed markets, as shown in the Deeper pockets chart, bode well for consumption trends globally. And a burgeoning middle class in emerging markets (EM) is developing the appetite-and means-to spend.

Yet the seemingly bright backdrop also features new complexities for consumer companies, and this is changing the opportunity set for investors. Large portions of the consumer sectors are at the forefront of major battles gripping markets: disruptive technology, new entrants upending competitive norms, and changing consumer preferences. We are also watching the extent to which imposed and looming tariffs may dent consumer sentiment. We see a mixed bag overall, but a generally brighter outlook for consumer discretionary versus consumer staples. The latter face gloomier earnings prospects. Against this backdrop, here's where we advocate shopping for consumer stocks.

Seek exposure to EM growth.

Focus on quality in staples.

Global equity outlook

Expand your definition of defense.

Don't completely break from "tradition."

Global equity outlook Kate Moore is BlackRock's chief equity strategist, and a member of the BlackRock Investment Institute. She is a regular contributor to The Blog .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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