Investors placed their bets early on, favoring companies that cater to consumers shopping beyond basics such as groceries and fuel. The Consumer Discretionary Select Sector SPDR Fund, which includes Tiffany, Coach, Best Buy Co. and Nike Inc., outperformed the SPDR Standard & Poor's 500 ETF Trust from November 2008 through October 2010 by more than 50%.
Easy Gains Over
The easy gains may be over: The S&P trust has risen 8.8% since November 26, 2010, while the consumer- discretionary ETF produced a 4.4% gain.
Doug Cliggott, a U.S. equity strategist at Credit Suisse, said he recommends an "underweight" position in these stocks for 2011.
"Three years into the market cycle, it's very uncommon for consumer discretionaries to be the leadership in the market," Cliggott said.
In the meantime, rising share prices signal rich shoppers will retain an edge in driving spending. The top 20% of income earners own about 80% of equity wealth and half of housing wealth, Maki estimates.
The S&P 500 Index has soared 91% from its March 2009 low. On top of that, President Barack Obama on Dec. 17 signed into law an $858 billion bill extending Bush-era tax cuts for two years for all income groups, instead of letting them expire for family earnings that exceed $250,000 a year, the cutoff the administration uses for the middle class.
Poverty Threshold
The Census Bureau estimates the poverty threshold for 2010 was $22,314 for a family of four.
"It's striking," said Dean Baker, co-director of the Washington-based Center for Economic and Policy Research. "Most of the rest of the country is still suffering while the wealthy seem to be largely insulated. You would think they wouldn't have all that much to complain about. Instead they've had unending criticism for the Obama administration."