Down 13.3% in the first four months of 2022, S&P 500 had its worst annual start since 1939. In April, every S&P 500 sector was down except for one…

What’s the big deal? With a 2.4% return, Consumer Staples was the only positive S&P 500 sector in April. Of the companies in the sector, 90% exceeded analyst estimates in their recent earnings reports.

• Altria (NYSE:MO) — the tobacco producer is up 16.8% in 2022.
• Coca-Cola Co. (NYSE:KO) — the beverage corporation is up 7.1% in 2022.

Per WSJ, earnings reports suggest consumer staple companies can still pass on higher costs to consumers.

Altria said its consumers are trading down to discount brands — and consumer staple brands could eventually find themselves impacted by higher inflation and lower consumer spending.

Slow and boring: “The boring, slow-growth, high-quality companies are doing well,” — per Goudy Willmering of Crewe Advisors (WSJ) — but defensive stocks are becoming pricier now:

• Getting expensive: Last week, the Consumer Staples sector became more expensive than the S&P 500’s Tech sector.
• The stat: For the first time since April 2020, the Consumer Staples sector’s price-to-earnings ratio was higher than the tech portion.

Looking forward: In two days, the Fed is expected to announce a 0.50% interest rate hike — with a 0.75% increase on the table. National Securities’ Chief Market Strategist Art Hogan is optimistic and thinks we’re “at or near that darkest place” (MW):

• Pointed out: In March, the S&P 500 rallied ~10% after the Fed raised interest rates.
• Recommends: A diverse portfolio with both lower risk and higher risk assets — as May’s market direction is still uncertain.

“We would not be at all surprised if we see a similar reaction after the May 4th communication.” (Fed announcement)