Consumer staples stocks trade weak amid commodity inflation worries
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Consumer staples were bid down in Monday trading as investors digested a flurry of news regarding the Russian invasion of Ukraine and far-reaching round of economic sanctions from western superpowers.
Notable decliners included Anheuser-Busch InBev (BUD
-6.9%), Philip Morris International (PM
-4.1%), Procter & Gamble (PG
-2.4%), Coca-Cola Europacific Partners (CCEP
-4.6%), B&G Foods (BGS
-3.9%), SunOpta (STKL
-3.4%), PepsiCo (PEP
-3.7%), British American Tobacco (BTI
-2.8%), Kellogg Company (K
-2.9%), TreeHouse Foods (THS
-2.5%)and Mondelez International (MDLZ
-2.7%).
Analysts attributed some of the weakness to investor concerns on the impact of higher commodity costs for consumer product giants in certain categories. In general, there is a lag period between higher commodity costs and pass-through price hikes to consumers. Freight costs could also move higher in the sector due to elevated fuel costs.
The consumer Staples Select Sector SPDR ETF (XLP
-2.0%) is down on the day, but has still outperformed the S&P 500 Index by a wide margin in 2022.