We’re rapidly approaching the big holiday sales season with the Black Friday’s results to be announced soon. But already at this point we can safely assume that despite an unprecedented cycle of interest rate hikes, U.S. consumers (perhaps, unlike some European consumers) are still doing well. In the short term, consensus earnings expectations may exceed forecasts thereby moving some consumer cyclicals higher.

The New York Fed's Q3 2023 "Household Debt and Credit Report" raised some concerns as delinquency rates rose during the quarter, especially in consumer-focused categories such as credit card debt and auto loans. However, the overall strength of household balance sheets remains largely intact, while consumer confidence (according to the Conference Board Index) and employment data are also proving relatively strong.

Discretionary ETFs aren't all that expensive when adjusted for their high-multiplier of very well accepted "Magnificent 7" components. Although individual stocks of the consumer discretionary sector often look expensive by their multipliers, on average trading at about 23 times earnings, the ultra-low-cost Fidelity MSCI Consumer Discretionary Index ETF (FDIS) looks very attractive.

FDIS seeks to provide investment returns corresponding to the performance of the MSCI USA IMI Consumer Discretionary 25/50 Index. The fund invests at least 80% of assets in securities included in the fund's underlying index, which is the MSCI USA IMI Consumer Discretionary 25/50 Index, representing the overall performance of the consumer discretionary sector in the U.S. equity market.