The Consumer Discretionary Select Sector SPDR Fund (NYSEARCA:XLY) closed lower by 6.5%, its worst trading performance in 26-months dating back to March 16, 2020 when the fund plunged 12.6%.
The Wall Street sell-off hit all corners of the market as investors fled the equity space watching key names like Target Corporation (TGT) -24.8%, Amazon (AMZN) -7.1%, Tesla (TSLA) -6.8%, and Lowe’s Corporation (LOW) -5.2% all fall lower.
Each of the four names above are held inside of XLY’s top ten holdings and cumulatively make up 45.72% of XLY. TGT is the seventh largest holding at 3.23%, while AMZN and TSLA are the exchange traded funds first and second heaviest weightings at 19.69% and 18.71% respectively. Moreover, LOW is the funds sixth largest holding at 4.09%.
XLY with its $16.11B assets under management was not the only consumer discretionary ETF to fall lower on the day. Other funds included the Vanguard Consumer Discretionary ETF (NYSEARCA:VCR) -6.3%, Fidelity MSCI Consumer Discretionary Index ETF (NYSEARCA:FDIS) -6.4%, and the Invesco Dynamic Leisure & Entertainment ETF (NYSEARCA:PEJ) -3.9%.
Year-to-date price action: XLY -31.5%, VCR -31.4%, FDIS -31.3%, PEJ -18.9%, TGT -30.3%, AMZN -36%, and -29.6%.
Investors looking for answers on when the selling might stop may not like what famed investor Jeremy Grantham told CNBC. Grantham said: “The other day we were down 19.9 on the S&P and about 27 on the Nasdaq,” he continued with “I would say that at minimum we are likely to do twice that and if we are unlucky, which is quite possible, we will do three legs like that and it may take a couple of years, as it did 2000.” Moreover, Wells Fargo now has a recession baked in as their base case.