Here is a link to the full report and here is a section from it:
Consumer Staples Stocks Have Historically Outperformed in the Months Preceding and Following the Initial Fed Funds Rate Cut
In Appendix A, we examine how the consumer staples group performs in the months preceding and following the initial Fed funds rate cut. Based on our work, the consumer staples group tends to outperform the S&P 500 in the 3 and 6 months preceding, as well as the 3 and 6 months following an initial fed funds rate cut. This suggests the near-term outlook based on history could continue to be supportive for the group if rate cuts materialize.
Consumer Staples Stocks Generally Outperformed in Prior Periods of Declining Treasury Yields
As we highlight in Exhibit 3, consumer staples stocks outperformed in five of the past six periods of decreases in Treasury yields over 150 bps increasing on average 15.5% vs. a 2.3% average gain in the S&P 500 during these five periods. In the most recent period of Oct. 2018 through Jul. 2019, consumer staples names have increased 17.8% on average vs. an 11.1% increase in the S&P 500.
The reliability of cashflows from the consumer staples sector gives them bond proxy characteristics. They become particularly attractive when bond yields are trending downwards.
Right now, yields are in a consolidation phase, suggesting some consolidation of recent strong gains is looking increasingly likely. Nevertheless, with the global outlook pointing towards further monetary and fiscal accommodation demand for income is likely to be a significant driver of equity returns over the coming year.
The S&P500 Dividend Aristocrat ETF has a similar pattern.