|Day's Range||8.35 - 8.35|
One of the big news items out Wednesday was another yield curve inversion. The yield curve inverts when yields on 10-year Treasuries fall below those on two-year notes and the scenario has historically proven to be a reliable recession indicator. There are some sectors that prove sturdy after the yield curve inverts and perhaps unsurprisingly, those are defensive groups, such as consumer staples and utilities.
Technically the stock market is still in an uptrend, but the indexes' inability to retake and stay above their 50-day moving average lines is disturbing.
The stock market worked off a midday slump but still closed with losses, after a wild week that saw the main indexes come back from steep declines.
August saw an awful start with global markets in the red mainly due to renewed trade tensions. Such market and ETF activities could rule the market in August.
The Utilities Select Sector SPDR (XLU) , the largest utilities sector exchange traded fund, is higher by nearly 14% year-to-date and some market observers assert that some defensive sectors are getting pricey, but reasons remain to consider utilities ETFs. The utilities sector is one of this year’s best-performing groups, underscoring the notion that many investors will embrace utilities stocks and exchange traded funds during favorable interest rate environments.
The stock market took a gut punch recently as a number of on-again, off-again headwinds started to blow at the same time. Investors quickly turned tail, seeking out more protective positions. Unsurprisingly, this trend led to an influx of inflows into some of the best defensive exchange-traded funds (ETFs).The Federal Reserve knocked Wall Street off-balance with a recent quarter-point drop in its benchmark Fed funds rate. Yes, it was the first such cut since the Great Recession. But some investors were hoping for a deeper reduction, and Fed Chairman Jerome Powell's subsequent press conference kept experts guessing about whether future rate cuts were any more or less likely.The U.S.-China trade war escalated next. At the start of August, President Donald Trump threatened to slap a 10% tariff on another $300 billion in Chinese imports effective Sept. 1, prompting Beijing to threaten retaliation. So far, China has announced it will suspend imports of U.S. agricultural products and let its currency, the yuan, tumble to an 11-year-low. The latter move is expected to agitate Trump, who has accused Beijing of currency manipulation in the past.Standard & Poor's 500-stock index dropped quickly, losing almost 4% between the July 30 close (the day before the Fed announcement) and the Aug. 5 market open. Some investors are going to cash - but others are seeking out areas of the market that might rise as the market falls, or places to collect dividends while waiting out the volatility.Here, we examine 11 of the best ETFs to buy if you're looking for portfolio protection. This relatively small cluster of funds covers a lot of ground, including high-dividend sectors, low-volatility ETFs, gold, bonds and even a simple, direct market hedge. SEE ALSO: The Kip ETF 20: The 20 Best Cheap ETFs You Can Buy
Is it time to turn away from TINA? TINA, of course, is the acronym for There Is No Alternative, in this case to common stocks, especially U.S. equities. Low interest rates make bonds unattractive and risky, according to this line of thinking, Alternative investments, such as private equity and hedge funds, are TINA’s version of a private dancer, promising an exclusive performance for those sufficiently well-heeled to pay for it.
As widely expected, the Federal Reserve cut interest rates by 25 bps for the first time since the 2008 financial crisis. We have highlighted ETFs & stocks from sectors that are expected to skyrocket on lower rates.
For the second quarter, Dominion Energy's (D) earnings are scheduled to be released on July 31. Dominion Energy will likely report an EPS of $0.76.
NextEra Energy’s adjusted earnings have risen 13% year-over-year. The company reported an EPS of $2.35, which beat analysts' consensus estimates.
NextEra Energy (NEE) will likely report its second-quarter earnings on July 24. The utility is expected to report an EPS of $2.28 for the quarter ended June 30.
The classic equity sectors to hunt for yield have been defense, consumer staples, and utilities. The idea has always been that these sectors provide less in the way of capital gains, compared to more volatile high-flying sectors like technology, but in exchange for the more moderate capital gains, investors get stability and yield.This year, however, as investors have tried to navigate the tail end of the business cycle and changing stances by the Federal Reserve, fund flows have gone to those classic defensive sectors. The result is double digit gains for the stock itself pre-dividend in year to date performance. Consumer Staples Select (NYSEARCA:XLP) is up almost 19%. The utility ETF Utilities SPDR (NYSEARCA:XLU) is not far behind, up 15%.Dividend yields have fallen under this scenario, and XLU yields just 3%, while XLP yields just 2.7%. It's clear then, that investors are going to need to look elsewhere for higher yields.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Energy, being rather out of favor this year, is offering some compelling opportunities. Dividend Stocks to Buy: Energy Transfer LPDividend Yield: 8.2%Energy Transfer (NYSE:ET) has been steadily executing on the strategic front. They have expanded their presence to China to meet growing demand for LNG and NGL products by opening an office in Beijing earlier in the year. ET signed a letter of intent with Sunoco (NYSE:SUN) to enter into a joint venture on a diesel fuel pipeline to West Texas. They have sold interests in certain pipelines to raise capital at attractive prices.Regardless of how the overall market is treating the energy sector, especially midstream master limited partnerships (MLPs), ET has not missed a beat. Financials are in good order with a distribution cash coverage ratio of 2.07x. Fiscal year adjusted EBITDA forecast of $10.7 billion have been reaffirmed.All the while the business keeps expanding. Plans on a Bakken pipeline optimization project will start next year. And on the Permian side, ET is expanding its Permian Express pipeline system by an incremental 120,000 barrels per day. The Permian Express 4 expansion is expected to be in service by the end of the third quarter of 2019.Cash flows are extremely healthy. The dividend is secure. And new projects are fueling growth. The future for ET looks better than good. DCP MidstreamDividend Yield: 10%DCP Midstream (NYSE:DCP) reported a strong first quarter yet yields remain sky high. This presents a great opportunity for patient investors who understand that equity sectors go on rotation and that there will be a day when the market wakes up and realizes how cheap companies have gotten.DCP owns and operates more than 60 plants and 64,000 miles of natural gas and natural gas liquids pipelines across 9 states. On this diverse base of assets, the company generated record distributable cash flow of $224 million in the first quarter. This puts the distribution coverage ratio at 1.45 times. So, despite difficult times for the sector, a best-in-class operator will still produce best-in-class results.NGL Energy Partner's (NYSE:NGL) pipeline throughput volumes was extremely strong, increasing approximately 30% year-over-year. In particular, Sand Hills and Southern Hills drove higher volumes. As a result, adjusted EBITDA set a record as well for the quarter. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Somehow DCP is just sitting there yielding 10%. Take advantage of the mispricing. BPDividend Yield: 6%BP (NYSE:BP) has a plan in place to secure long-term cash flow distributions to shareholders. Oil prices have been volatile, but their turnaround strategy is well underway.There are a number of ramp-up projects, three of which came on stream in Q1, and another that is scheduled to come on stream in Q2. These ramp-ups should make up for some lost volume that has certain analysts concerned.The good news is that most of the major turnarounds are behind BP, so the company is now in more of a steady state. There will be some impact in Q2 but not to the extent that the market seems to be pricing in.Lubricants, which has been a great business, has recently run into some issues with base oil prices, but management indicates that is leveling off. BP has made major efforts starting late last year to make that department more efficient, so there are ways to work around the headwinds.A recovery across a couple of BP's business lines going forward, in addition to the refinery system readying to go "full tilt" in 2020, has positioned the company well both from a growth and cash flow standpoint. Being paid 6% for the company's thought through strategy to play off isn't a bad deal. As of this writing, Luce Emerson was long shares of Energy Transfer LP. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Best Dividend Stocks to Buy in the Energy Sector appeared first on InvestorPlace.
Southern Company (SO) declared a quarterly dividend of $0.62 per share on Monday. The dividend is in line with the previous quarterly dividend.
Shares of PNM Resources Inc. were indicated down nearly 3% in premarket trading Friday, after the electric utilities company cut its profit guidance for the second quarter and the full year, citing "substantially milder temperatures" in New Mexico. PNM lowered its Q2 earnings-per-share estimate to 36 cents to 38 cents from 57 cents to 59 cents, well below the FactSet consensus of 62 cents. The 2019 EPS guidance range was lowered to $2.05 to $2.11 from $2.10 to $2.20, versus the FactSet consensus of $2.15. "The PNM service territory experienced its mildest second quarter over the last 19 years, resulting in 37% lower cooling degree-days and lower expectations for second quarter ongoing earnings," the company said in a statement. PNM's stock has rallied 22.7% year to date through Thursday, while the SPDR Utilities Select Sector ETF has climbed 15.3% and the S&P 500 has advanced 19.7%.