This Soft-Drink Maker Is Now Masquerading as a Mega-Tech Company

PepsiCo (PEP) made its way into the tech-heavy Nasdaq Composite Index five years ago... That might sound strange on its own. After all, Pepsi is a soft-drink maker. It doesn't scream "mega-tech company" to anyone. [Chaikin PowerFeed]( This Soft-Drink Maker Is Now Masquerading as a Mega-Tech Company By Pete Carmasino, chief market strategist, Chaikin Analytics PepsiCo (PEP) made its way into the tech-heavy Nasdaq Composite Index five years ago... That might sound strange on its own. After all, Pepsi is a soft-drink maker. It doesn't scream "mega-tech company" to anyone. However, the idea isn't entirely outlandish. The Nasdaq is tech-heavy, but it's not only tech stocks. With that said... something even stranger is happening with Pepsi's stock right now. As I'll explain, it's a telling sign about the current state of the tech sector. And it leads us to another sector worth keeping our eyes on as we head into the new year... Recommended Links: [Here's What You Missed Last Week [2023 Fed Warning]]( "The Fed's next move will decide if you make huge gains or suffer massive losses in 2023," says Marc Chaikin. Recently, Marc revealed the ONLY Wall Street indicator with a 100% success rate of predicting where the Fed will send the stock market next - going all the way back to 1955. And he detailed exactly what to do with your money before January 1 to prepare. [Click here to watch (includes two free recommendations)]( [U.S. Stock Market "Inflection-Point" Is Underway]( In recent weeks, there have been a growing number of warning signs of the next massive shift in the stock market. If you're older than age of 50 and your retirement plans depend on your portfolio recovering in the next few years, you must [see how this could affect your money](. First, let's cover the strange situation with Pepsi's stock... In short, tech stocks have had such a bad year that Pepsi now sits near the top of the Nasdaq in terms of position weighting. Yes, you read that right... The most popular tech-focused index now features a soft-drink maker in its top 10 holdings. Pepsi is right there with Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META). We can see the current allocations through the Invesco QQQ Trust (QQQ). This exchange-traded fund is widely considered to be the preferred Nasdaq-tracking vehicle in the market. Here's the current breakdown of QQQ's top 10 holdings... [Chaikin PowerFeed] It's a head-scratcher for sure. But let me be clear... There isn't anything wrong with Pepsi inching into the Nasdaq's top 10 holdings. However, the stock is only up about 5% in 2022. That should tell you all you need about tech stocks. And here's why it matters for us as investors heading into 2023... You see, Pepsi is in the consumer staples sector. This sector is considered a "defensive" investment. And we've needed to play a lot of defense in 2022. So it makes sense that it has significantly outperformed this year... [Chaikin PowerFeed] As you can see, the Consumer Staples Select Sector SPDR Fund (XLP) is only down about 2% so far this year. That performance trounces QQQ's drop of more than 30% in 2022. Now, look back at the list of QQQ's top 10 holdings. You'll notice that it features another consumer staples stock – membership-only retailer Costco Wholesale (COST). That leads us to our takeaway... Even the tech-heavy Nasdaq is signaling that the consumer staples sector is a great place to be as tech stocks tumble. It now features two stocks from this sector in its top 10 holdings. Keep that in mind as investors continue to get defensive in early 2023. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +1.59% 9 20 1 S&P 500 +1.48% 123 266 109 Nasdaq +1.45% 26 53 21 Small Caps +1.68% 495 932 463 Bonds +0.25% Energy +1.90% 1 17 5 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks have turned somewhat Bullish. Major indexes are mixed. * * * * Top Movers Gainers [rating] NKE +12.18% [rating] APA +5.76% [rating] ETSY +5.69% [rating] HAS +5.31% [rating] ENPH +4.98% Losers [rating] HST -6.09% [rating] WBA -2.35% [rating] WDC -2.18% [rating] CTLT -2.05% [rating] SWK -1.82% * * * * Earnings Report Reporting Today Rating Before Open After Close PAYX KMX No earnings reporting today. Earnings Surprises [rating] MU Micron Technology, Inc. Q1 $-0.04 Missed by $-0.02 [rating] CTAS Cintas Corporation Q2 $3.12 Beat by $0.09 [rating] CCL Carnival Corporation & plc Q4 $-0.58 Missed by $-0.43 * * * * Sector Tracker Sector movement over the last 5 days Energy +0.50% Financial -1.62% Industrials -1.87% Staples -2.05% Utilities -2.70% Health Care -2.78% Materials -3.88% Communication -4.52% Information Technology -4.86% Discretionary -4.90% Real Estate -5.53% * * * * Industry Focus Health Care Equipment Services 15 47 18 Over the past 6 months, the Health Care Equipment subsector (XHE) has outperformed the S&P 500 by +6.94%. However, its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #14 of 21 subsectors and has moved down 1 slot over the past week. Indicative Stocks [rating] GKOS Glaukos Corporation [rating] CNMD CONMED Corporation [rating] TNDM Tandem Diabetes Care * * * * You have received this e-mail as part of your subscription to PowerFeed. 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