consumer discretionary
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Consumer Consumer DiscretionaryDiscretionary
July 17, 2007July 17, 2007
Haixia JiHaixia Ji
Jaime NaleJaime Nale
Adam RobertsonAdam Robertson
Hui SongHui Song
S&P 500 Composition S&P 500 Composition as of as of 07/06/0707/06/07
3.14%
3.48%
3.68%
9.20%
10.23%
10.93%
11.10%
11.74%
15.67%
20.82%
Materials
Utilities
Telecommunication Services
Consumer Staples
Consumer Discretionary
Energy
Industrials
Health Care
Information Technology
Financials
Industry Breakdown Industry Breakdown as of as of
06/30/0706/30/07
0.6%
1.2%
1.9%
2.1%
2.2%
4.0%
4.5%
5.7%
11.3%
15.1%
18.4%
33.0%
Distributors
Diversified Consumer Services
Leisure Equipment & Products
Internet & Catalog Retail
Auto Components
Automobiles
Textiles, Apparel & Luxury Goods
Household Durables
Multiline Retail
Hotels Restaurants & Leisure
Specialty Retail
Media
Top 10 HoldingsTop 10 Holdings as of 07/15/07as of 07/15/07
1.83%
2.09%
3.35%
3.70%
4.32%
4.48%
4.93%
5.71%
5.84%
6.30%
CBS
Viacom
Lowe's
News Corporation
Target
McDonald's
Walt Disney
Home Depot
Time Warner
Comcast
Select Sector SPDR’s Select Sector SPDR’s Composition and Returns YTDComposition and Returns YTD
as ofas of 06/30/0706/30/07
3.20%
3.52%
9.20%
9.81%
11.22%
11.23%
11.62%
19.44%
20.75%
17.02%
9.08%
4.72%
2.90%
18.04%
12.04%
6.40%
10.14%
-0.57%
Materials
Utilities
Consumer Staples
ConsumerDiscretionary
Energy
Industrials
Health Care
Technology
Financials
ReturnYTDSectorWei ght
Business AnalysisBusiness Analysis
Mature Mature SectorSector
Foreign Foreign InfluenceInfluence
Cyclicality Cyclicality
SeasonalitySeasonality
Quarterly Revenues of LTD
0200400600800
1000120014001600
Q4 200
6
Q3 200
6
Q2 200
6
Q1 200
6
Q4 200
5
Q3 200
5
Q2 200
5
Q1 200
5
Q4 200
4
Q3 200
4
Q2 200
4
Q1 200
4
Quarter
Re
ve
nu
es
in M
illio
ns
Revenues
Economic AnalysisEconomic Analysis
Changes in the Federal Funds RateChanges in the Federal Funds Rate
Economic AnalysisEconomic Analysis
UnemploymentUnemployment
Economic AnalysisEconomic Analysis
Discretionary IncomeDiscretionary Income
Economic AnalysisEconomic Analysis Gasoline PricesGasoline Prices
Economic AnalysisEconomic Analysis
Economic AnalysisEconomic Analysis
Economic AnalysisEconomic Analysis
Mixed indicationsMixed indications Federal Funds Rate Federal Funds Rate Strong Unemployment FiguresStrong Unemployment Figures Discretionary Income GrowingDiscretionary Income Growing Gasoline Appears OverpricedGasoline Appears Overpriced
Encouraging PotentialEncouraging Potential
Financial AnalysisFinancial Analysis
S&P 500 Financial S&P 500 Financial AnalysisAnalysis
Income Statement Income Statement AnnualAnnual
Income Statement Qtr.Income Statement Qtr.
Cash Flow AnnualCash Flow Annual
Financial AnalysisFinancial Analysis
Valuation Analysis 10-Valuation Analysis 10-yearsyears
Valuation Analysis 10-Valuation Analysis 10-yearsyears
Valuation Analysis 10-Valuation Analysis 10-yearsyears
Currently all measures of valuation Currently all measures of valuation is relative higher than the 10 years is relative higher than the 10 years averageaverage
All five graphs show the same All five graphs show the same upward trend since 2000, but the upward trend since 2000, but the plots do show the contract sign this plots do show the contract sign this year.year.
The whole sector is inline to The whole sector is inline to overpriced relative to the market. overpriced relative to the market.
RecommendationsRecommendations
Sector should be even-weighted Sector should be even-weighted instead of 100 Basis Points instead of 100 Basis Points underweightunderweight
Currently inline to slightly expensive Currently inline to slightly expensive when compared to S&P 500when compared to S&P 500
Positive economic outlookPositive economic outlook
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