Safety Stocks Getting Whacked

Consumer staples perform "extremely well" in times of market turmoil, serving as an excellent place to hide during market collapses and times of economic uncertainty. High dividends combined with consistent earnings provide some sense of relief even during the bleakest of moments. Recent events have once again showcased that fact, as the Consumer Goods Sector has been the best performing area of the market during the recent market selloff. The flip side of that correlation is that when the market rallies, appetite for risk emerges once again, punishing these stocks in the process. Today's broad-based market rally has seen money flow out of the safety names and into the more economically “risky” sectors such as financials and basic materials, which are the two leading sectors in today's action, currently up 4.4% and 3.7% respectively. The Consumer Goods Sector, is the weakest performing area of the market in today's session, even though it is up 0.9% on the session. If you believe that the market still has some room to the downside, the correction may serve as a great opportunity to get long some of these stocks. Conversely, if you believe that the market rally will continue into the foreseeable future, shorting stocks near elevated levels would not be a bad idea. Some “safety stocks” taking a hit in today's trading action currently are: 1) General Mills GIS: Shares of General Mills are currently trading down 1% from yesterday's close to $35.25. 2) Kraft Foods KFT: Shares of Kraft are currently trading down 1% from yesterday's close to $33.38. 3) Colgate Palmolive CL: Shares of Colgate are currently trading down 0.9% from yesterday's close to $82.08. 4) Pepsico PEP: Shares of Pepsico are currently trading down 0.6% from yesterday's close to $62.59. 5) Phillip Morris International PM: Shares of Phillip Morris are currently trading down 0.7% from yesterday's close to $65.81.