Retail, e-commerce stocks soar, consumer staples sag as risk-on mood persists

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Retail and e-commerce stocks continued to run higher on Friday, adding to gains from Thursday, while its more defensive counterparts continued to dip.

In a continued trend stemming from the cooler than expected CPI report on Thursday, growth-oriented and high-PE consumer-facing companies saw shares roared higher on Friday. Notable gainers in the retail space included footwear and apparel manufacturers Nike (NKE) +6.45%, VF Corp. (NYSE:VFC) +8.76%, Ralph Lauren (RL) +7.9%, On Holding (ONON) +7.41%, Tapestry (TPR) +8.07%, Capri Holdings (CPRI) +8.91%, and PVH Corp. (PVH) +9.04% as apparel prices cooled off in October. Retail outlets like Macy’s (M) +5.41%, The Gap (GPS) +6.33%, Kohl’s Corporation (KSS) +6.92%, American Eagle Outfitters (AEO) +6.12%, and Nordstrom (NYSE:JWN) +4.12% also rising sharply for the second day.

Meanwhile, the e-commerce sector saw its stalwart names Amazon (NASDAQ:AMZN) +4.39%, Shopify (SHOP) +9.81%, and Etsy (ETSY) +4.56% rising sharply alongside other sector players like Farfetch (FTCH) +16.42% and Chewy (CHWY) +4.82%. Heavily shorted names like Wayfair (W) +12.88% and Carvana (CVNA) +11.56% also surged higher, extending post-CPI gains to nearly 30% for each.

By contrast, more defensively oriented socks like Pepsi (NASDAQ:PEP) -3.09% and Coca Cola (KO) -0.49% both sliding alongside starker declines for packaged food players like General Mills (GIS) -4.09%, Post Holdings (POST) -4.81%, Campbell Soup (CPB) -4.27%, Hershey (HSY) -4.96%, Conagra Brands (CAG) -3.35%, Cal-Maine Foods (CALM) -6.76%, JM Smucker (SJM) -3.2%, and B&G Foods (BGS) -4.84%.

In addition to the market sentiment shift, analysts have noted that the latter group could be hurt rather than helped by moderating inflation as sales and earnings momentum may slow sans persistent price hikes. For example, Conagra reported that it was able to offset a nearly 5% year over year decline in sales volumes for the third quarter by promoting a 14.3% increase in prices. In the latest CPI report, the food-at-home index saw its slightest jump in about a year.

Read more on declines across healthcare stocks as traders shift away from the defensive allocation.