Right Tail Risk in Consumer Discretionary

Goldman Sachs argues that the Consumer Discretionary sector is poised for a significant rally driven by accelerating fundamentals and record-low hedge fund positioning.

Key Takeaways

• 1.Consumer Discretionary is positioned for a rally due to a combination of strong March/April fundamentals and near-record light positioning.
• 2.GS Prime Brokerage data indicates that the Hotels, Restaurants & Leisure subsector is at 5-year lows for gross and net allocations.
• 3.Corporate commentary from major players like Walmart and United Airlines suggests accelerating consumer trends in the second quarter.

Table of Contents

• RIGHT TAIL RISK IN CONSUMER DISCRETIONARY
• Recent Consumer Commentary - Strong
• Restaurants – Expect a Solid 1Q
• GS PB Data – Primed for a Rally

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