Consumer Discretionary (XLY) vs Staples (XLP)
XLY (Consumer Discretionary SPDR) closed at $118.69 on April 24, 2026, with Amazon at 26.69 percent and Tesla at 17.66 percent dominating the fund (44 percent combined weight). XLP (Consumer Staples SPDR) was at $83.48 the same day, with Walmart at 11.85 percent and Costco at 9.62 percent.
Also known as: Consumer Discretionary (XLY) (ETF_XLY, consumer discretionary) · Consumer Staples (XLP) (ETF_XLP, consumer staples)
Why This Comparison Matters
XLY (Consumer Discretionary SPDR) closed at $118.69 on April 24, 2026, with Amazon at 26.69 percent and Tesla at 17.66 percent dominating the fund (44 percent combined weight). XLP (Consumer Staples SPDR) was at $83.48 the same day, with Walmart at 11.85 percent and Costco at 9.62 percent. The XLY/XLP ratio of 1.42 sits in the upper half of its post-2010 range, indicating consumer-confidence strength even as the Iran war drives modest defensive flows. The ratio has historically signaled major equity market tops by breaking long-term trendline support, most cleanly in 2000 and 2007.
What XLY and XLP Hold
XLY (Consumer Discretionary Select Sector SPDR Fund) holds 51 stocks representing the consumer discretionary sector of the S&P 500. April 2026 top holdings: Amazon 26.69 percent, Tesla 17.66 percent, Home Depot 5.69 percent, TJX Companies 4.05 percent, McDonald's 4.05 percent. The top 10 holdings represent 70.91 percent of fund assets, making XLY a highly concentrated bet on a small number of names. AUM approximately $25 billion, expense ratio 0.08 percent.
XLP (Consumer Staples Select Sector SPDR Fund) holds about 38 stocks in consumer staples. Top holdings: Walmart 11.85 percent, Costco 9.62 percent, Procter & Gamble 7.30 percent, Coca-Cola 6.40 percent, Philip Morris 5.60 percent. The fund is less concentrated than XLY, with the top 5 representing roughly 41 percent of assets. AUM approximately $15 billion, expense ratio 0.08 percent. Both funds offer the cleanest cyclical-defensive sector access at minimal cost.
The Ratio as a Cycle Indicator
The XLY/XLP ratio captures whether investors prefer cyclical consumer spending exposure or defensive staples exposure. When the ratio rises, investors are betting on consumer spending strength and economic growth. When it falls, investors are de-risking toward inelastic demand companies whose revenues hold up through downturns.
The long-term context matters. Pre-2008, the ratio averaged 0.7 to 0.9. Post-financial-crisis the ratio expanded sharply, from 0.7 in 2009 to 1.2 in 2017, 1.5 in 2020, and a 2021 peak above 1.6. The expansion reflects three factors: Amazon's rise (now 27 percent of XLY versus minimal weight pre-2010), Tesla's addition (17 percent now versus zero pre-2020), and structural growth in e-commerce. The ratio is therefore not strictly comparable across decades; the modern range of 1.3 to 1.6 has different implications than the pre-2008 range of 0.6 to 1.0.
The Amazon-Tesla Concentration
Amazon at 26.69 percent and Tesla at 17.66 percent constitute 44 percent of XLY combined. This concentration matters because both stocks have idiosyncratic dynamics that can drive the entire ETF independently of consumer discretionary fundamentals. Amazon's AWS revenue (cloud computing) is roughly 60 percent of operating income but classified within consumer discretionary because of retail dominance. Tesla's exposure includes both auto sales and energy storage, both with substantial volatility.
Conditional Forward Response (Tail Events)
How Consumer Staples (XLP) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Consumer Discretionary (XLY). Computed from 1,281 aligned daily observations ending .
Following these triggers, Consumer Staples (XLP) rises 0.03% on average over the next 5 sessions, versus an unconditional baseline of +0.08%. 129 qualifying events; Consumer Staples (XLP) closed positive in 53% of them.
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Frequently Asked Questions
What is the current XLY/XLP ratio?+
The ratio is approximately 1.42 in April 2026 ($118.69 XLY / $83.48 XLP). The ratio has traded in a 1.35 to 1.50 range through Q1 to Q2 2026 after recovering from a 1.10 low in late 2022. The post-2010 range has been 0.7 to 1.6, with the modern era reflecting structural shifts (AMZN and TSLA growth in XLY, WMT and COST growth in XLP). The 2021 peak of 1.6 was driven by COVID-era reshuffling of consumer spending toward XLY-heavy categories. The current 1.42 reading is in the upper half of the post-2010 range, broadly consistent with consumer-confidence strength.
What does XLY/XLP at 1.42 mean?+
A reading of 1.42 indicates investor preference for cyclical consumer spending exposure over defensive staples. Historically, ratios above 1.30 have been associated with expansion-phase markets where consumer confidence supports discretionary spending growth. Below 1.10 has been associated with recession risk. The April 2026 reading at 1.42 is in the upper-middle of the modern range, suggesting cyclical strength persisting without extreme overconfidence. The ratio has been trending sideways since late 2024, indicating stable consumer fundamentals rather than accelerating or decelerating dynamics.
Has the XLY/XLP ratio predicted past recessions?+
Yes, most cleanly in 2000 and 2007. In late 2007 the ratio broke below its 200-day moving average and a multi-year trendline several months before the October 2007 S&P 500 peak. The ratio fell from 0.95 in mid-2007 to 0.55 in March 2009, a 42 percent decline tracking the bear market timing closely. The 2000 break was similar. False signals occurred in 2014 to 2015 (China slowdown) and 2018 (trade war), where ratio declines did not extend into full bear markets. The signal is probabilistic: break of long-term support raises recession probability but requires cross-reference with credit, yield curve, and labor data.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.