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Consumer Discretionary. July 17, 2007 Haixia Ji Jaime Nale Adam Robertson Hui Song. S&P 500 Composition as of 07/06/07. Industry Breakdown as of 06/30/07. Top 10 Holdings as of 07/15/07. Select Sector SPDR’s Composition and Returns YTD as of 06/30/07. Business Analysis.
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Consumer Discretionary July 17, 2007 Haixia Ji Jaime Nale Adam Robertson Hui Song
Select Sector SPDR’s Composition and Returns YTDas of06/30/07
Business Analysis • Mature Sector • Foreign Influence
Economic Analysis • Changes in the Federal Funds Rate
Economic Analysis • Unemployment
Economic Analysis • Discretionary Income
Economic Analysis • Gasoline Prices
Economic Analysis • Mixed indications • Federal Funds Rate • Strong Unemployment Figures • Discretionary Income Growing • Gasoline Appears Overpriced • Encouraging Potential
Valuation Analysis 10-years • Currently all measures of valuation is relative higher than the 10 years average • All five graphs show the same upward trend since 2000, but the plots do show the contract sign this year. • The whole sector is inline to overpriced relative to the market.
Recommendations • Sector should be even-weighted instead of 100 Basis Points underweight • Currently inline to slightly expensive when compared to S&P 500 • Positive economic outlook