Welcome back to the U.S. stock market analysis channel. I’m lorder. Today marks the close of June trading. While all four major indices finished in the green, market breadth was actually quite poor. Among S&P 500 components, only 210 stocks rose, while 290 declined. Of the eleven S&P sectors, only technology and industrials posted notable gains, with consumer discretionary and basic materials edging up slightly. Seven sectors fell, three of which declined by more than 1%. The market once again showed a top-heavy pattern, with a handful of large-cap stocks pulling the indices higher. If your portfolio wasn’t positioned in those few rising names, your account was likely still down. This effectively punishes diversification, and some traditional diversified strategies have performed quite poorly recently.

That said, many of the sectors that fell today were among June’s top performers, clearly influenced by pension rebalancing and some month-end selling. Why wasn’t tech sold off more? In reality, the number of advancing stocks within the tech sector was small, and the sector as a whole barely moved in June. Let’s start with two data points today, then provide updates on four consumer stocks that many of you have been asking about. I’m sure a lot of you hold these consumer names, expecting them to be more defensive in a high-market, risky environment, only to see them disappoint. What’s going on with them? What’s their value? How do the technicals and outlook look? Nike reported earnings today and is down another 3% after hours. Is there any bottom in sight?

We hold a cautious, wait-and-see stance on consumer stocks, especially consumer discretionary. The market closed out June with a top-heavy, divergent pattern, driven by a small number of tech and industrial stocks lifting the indices, while most sectors and individual stocks declined. The consumer sector is under pressure due to high inflation expectations and earnings headwinds. Valuations may appear cheap, but there’s a lack of upward catalysts. In the current environment, patience is advised. Consider holding cash or low-risk money market instruments as a safe haven, rather than rushing into consumer stocks.

Let’s look at two data points today. First, May’s job openings were essentially flat, edging down slightly from 7.618 million. The data itself wasn’t a major surprise, but combined with other recent economic indicators, market concerns about inflation and consumer spending power haven’t eased. Sector rotation within the S&P is also clear: tech and industrials are up, but other sectors are down. In this kind of structural market, diversification isn’t working well. Month-end and quarter-end pension rebalancing is also distorting short-term moves, making it harder to read the tape.

Now let’s go through these four consumer stocks. First, McDonald’s MCD. The price appears undervalued, but growth is slowing, so the forward P/E needs to be discounted. Technically, it’s under pressure after breaking below 281 and needs to reclaim above 286 to confirm stabilization. Support lies at 260 and 267, with deeper zones at 239 to 256, and 223 to 228. The outlook is bearish; we’re looking for signs of a bottom.

Nike NKE. The after-hours price is around 41.8. Earnings showed weakness across several major markets, with continued revenue declines. Technically, it needs to break above 47.5 to reverse the downtrend. The historical validity of support at 38.4 and 41.8 is questionable. If the weakness persists, there’s even a risk of being removed from the Dow Jones Industrial Average. The outlook is bearish.

Costco COST. Recently dropped from 1096 to 935. The stock has been relatively resilient due to its pricing power and stable membership fee income. However, valuation is high, and the forward P/E doesn’t match its growth rate. Key support is at 867. As long as it holds above that level, it can trade sideways. But if it breaks below, a bearish trend could emerge with a deep correction. Recommendation: wait and watch for a margin of safety.

Walmart WMT. The current market price is around the 110 support level, but the stock is severely overvalued with limited upside. Key support below is at 92.8. If that breaks, it could trigger a deep correction lasting 1.5 to 2 years, potentially targeting the low $70s. The outlook is bearish; overvaluation risk is clear.

Structural market risk is evident. Index gains are driven by a few heavyweight stocks, while most stocks decline, making diversification potentially ineffective. On the macroeconomic side, high inflation expectations are eroding consumer purchasing power, directly impacting consumer company earnings, especially in consumer discretionary. For individual stocks, Nike faces revenue weakness in major markets, continued earnings declines, and the risk of being removed from the Dow. Costco and Walmart, while relatively resilient, are already highly valued and face the risk of a valuation-driven selloff. All consumer stocks face industry-wide pressure from slow cost pass-through and limited pricing power. In terms of timing, consumer stocks are not a must-buy right now. It’s better to wait for a more attractive price with a margin of safety. Blindly buying the dip could lead to further losses. Month-end and quarter-end pension rebalancing and other fund flows may also distort short-term market moves, making it harder to read the tape.

In this market, where there aren’t many opportunities elsewhere, I wanted to give you this update on these four consumer stocks so you understand the pressures they’re facing. They’re under strain, not something you need to rush into. There’s no urgency. Starting tomorrow, we enter second-half trading. Over the next few days, we’ll see where new capital flows are directed and whether there are any changes. This week’s programming will continue as usual. Give it another couple of days to see where the money moves, and we should start to get a clearer picture—at least better than the chaotic past three or four days. Alright, that’s all for today. See you tomorrow at the same time.