Consumer staples: food, beverage, household products, tobacco (TRAI cluster 4)

_Last updated 2026-11-06 13:00 ET from report. Screening/research, not investment advice._

What's in it (TRAI universe)

• 60d clusters asOf 2026-11-05 (updated): Cluster 19 tobacco — PM, MO (avg ρ 0.685). Cluster 4 food/bev/HPC + some discretionary — KHC, KO, PG, PEP, MDLZ, TGT, NKE, MCD, HD, LOW (avg ρ 0.621). Cluster 13 — BRK-B, WMT, COST (avg ρ 0.566). (Earlier Oct 22 note had PM/MO inside a single cluster 4; that merge is obsolete.)
• TRAI liquidity (typical): PG, KO and COST often fail ATR% < 2%; MDLZ and KHC fail ADV < $500M. Tradable staples often include PEP, MO, PM, WMT, TGT.
• Two sub-groups on print days (Yahoo daily 2022–2026, prior calc): tobacco (PM↔MO, same-sign ~65–74%) and food/bev/HPC (KO, PEP, MDLZ, PG, KDP). PM prints move PEP the opposite way (ρ −0.41). The 11-05 clusters now match that split (S-147).

Why they move

• Anti-semis rotation in 2026: core-semis avg ρ −0.38 (KHC) to −0.60 (MO). XLP–SMH ρ: 2022 +0.51 → 2026 YTD −0.39 (my calc). On 10-22 (SMH −5.99%) XLP rose +3.31%, its second-biggest day since 2022.
• Input costs / oil: PG's commodity headwind rose to ~$1.4B (Reuters, 2026-10-22); PM guided to the lower half on energy costs (Reuters, 2026-10-21); PEP cut core EPS growth to 2.5–3.5% on 10-08. Brent >$116 on 10-23 (Yahoo live).
• Consumer: UMich Oct final 48 (lowest since May), inflation expectations highest since May (MT Newswires via Yahoo, 2026-10-23). P&G sees a "bifurcated" consumer (CNBC, 2026-10-22).
• Bottlers and the dollar (whiggity consult, report §9): KO's concentrate model leaves packaging/distribution with bottlers (10-K). PM is ~93% international (Q3 US = 7.4% of revenue), MO is US-only. A quick test shows the KO→PM print-day link is the XLP factor, not DXY (S-056).
• Crowding: XLP +10.6% vs SPY over 20 days, RS quadrant "leading" (TRAI /api/macro asOf 10-22).

Event log

• 2026-10-08 PEP Q3: guide cut; stock +3.73% c-c.
• 2026-10-21 PM Q3: gap −6.38% bought (+5.51% day-1).
• 2026-10-22 PG FY27 Q1 beat (+5.58%); XLP +3.31% on the semis rout.
• 2026-10-23: XLP −1.92%; staples led S&P declines (Reuters). TRAI fade-shorts MO/PEP/TGT worked (o→c −1.62% to −2.66%).

Upcoming catalysts

• Mon 10-26 KOF* BMO (bottler; moved from 10-27) · Tue 10-27 KO BMO · Wed 10-28 FOMC 2 PM · Thu 10-29 MO BMO (+GDP/PCE 8:30) · Thu 10-29 MDLZ AMC · Fri 10-30 CL BMO* · Wed 11-04 KHC BMO · 11-18 TGT · 11-19 WMT · 12-10 COST. Sources in the report §6.1. CCEP trading update Tue 11-03.
• Consensus (secondary): KO EPS $0.88 / rev $12.90–12.93B; MO EPS $1.50–1.51 / $5.31B (report §9 items 2–3).

Typical reaction (TRAI /api/events, last 4)

• KO 2.32 ATR, fill 0/4. MO 2.73 ATR, fill 0/4, continuation 75%. PG 1.97 ATR, fill 0/4. PM 1.21 ATR. MDLZ 0.97 ATR. PEP 0.61 ATR. KHC 1.22 ATR.
• After XLP ≥ +1.5% & SMH ≤ −3% days: next-day staples basket o→c −1.03% when SMH rose (n 6), −0.43% when it fell (n 5). Unconditional next-day XLP after +1.5% days: ≈ 0 (n 50) (Yahoo, my calc).

Company notes

KO · PEP · PG · MO · PM · MDLZ · TGT

2026-10-29 17:00 update

• MO Q3 beat, FY guide raised to $5.66–5.74, +$1B buyback; +5.15%, long_momentum for 10-30. MDLZ (4:05 PM) reaffirmed FY, organic +2.1%; after hours +3.15% (MO ρ 0.60) (S-073).
• Source: 2026-10-29 17:00 report.

2026-10-30 09:00 update

• Staples bid: MDLZ +7.1% (beat, margin +380bp), KO/PEP/PG ~+2%, HSY +2.0%, KHC +2.1%, GIS +2.7%, MO +1.4% (Yahoo ~09:17). The broad move means HSY is not a MDLZ-specific sympathy trade (whiggity's suggestion). MDLZ · MO · KO
• Source: 2026-10-30 09:00 — premarket rotation, INTC/crypto shocks, BMO prints.

2026-10-30 10:00 update

• 10-30 ~10:13 ET: the staples bid is mostly in the gap. XLP +1.49% (gap +2.01%, −0.51% from open); PG +1.63% (−1.0% from open), KO +1.66%, PEP +1.85%, MDLZ +3.81%, KHC +3.14%. MO (long_momentum) fell below its OR30 low (S-082/S-083). KHC reports 11-04 BMO.
• 2026-10-30 10:00 — open follow-through, telecom/pharma bid, software split

2026-10-30 15:00 update

• MO (+1.88%) and XLP (+1.53%) are acting as long-vol hedges today: intraday ρ to ΔVIX +0.35 / +0.29, β to SPY −0.95 / −0.64. MDLZ +3.99%; PM faded to flat from a +2.81% high. KHC prints 11-04 BMO (MO 60d ρ 0.52).
• 2026-10-30 15:00: LM day-2 follow-through and weekend gap (CVNA/CMG/DASH/BA/MO)

2026-11-06 13:00 update — PM residual crush / cluster split

• Fri 8:58 SM "Consumer Staples ×4": PM (residZ −5.0, Thu −4.63%), MDLZ (−2.16), PG (−0.81), WMT (−0.39). MO had residZ −2.63 but no SM signal.
• Midday ~13:13 ET (Yahoo): PM ~−1.1%, MO ~−1.3%, BTI ~−3.1%, XLP ~−0.7% while SPY ~+0.5%, VIX ~25.7 (still stress). Residual crush continuing for tobacco — not a HON-style midday fade bounce.
• Macro asOf 11-05: XLP still 20d leader vs SPY (+14.7%, RS leading) with SMH −21% — crowding give-back backdrop.
• Next dated in-universe: TGT 11-18 BMO, WMT 11-19 BMO; PM next null; MO/PG est. late Jan 2027.
• Proposal S-147: split staples SM/MR risk by cluster 19 / 4 / 13 (parallel to industrials S-146).
• Source: 2026-11-06 13:00 — PM residual crush.