|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||0.00 - 0.00|
|52 Week Range|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.44%|
Stodgy stocks are looking more dangerous by the day. Steadily rising inflation expectations could pose a risk to rate-sensitive stocks such as utilities, which become less alluring as bond yields rise....
The utilities sector is making the most of all the uncertainty that???s looming around with most stocks and ETFs hitting fresh highs.
Utility stocks are rising high. It was only last week that the PHLX Utility Index (UTY) submitted above the 689 to reach a new all-time intra-day high. Among their worries, are that dividend yields fall as stock price rise, rising interest rates and investors stretching ahead into 2020 to justify current multiples.
On July 6, 2017, NRG Energy (NRG) stock was trading at a 1% and 9% premium to its 50-day and 200-day moving average levels, respectively.
After a sustained fall in the last few trading sessions, the Utilities Select Sector SPDR (XLU) seems to be trading deep in the oversold zone.
Due to heavy infrastructure requirements, utilities (XLU) generally carry large amounts of debt on their books.
Utilities tend to carry heavy amounts of debt on their books, and so higher interest rates increase their debt servicing costs.
US utility stocks have outperformed broader markets so far this year. The Utilities Select Sector SPDR (XLU) has managed to gain nearly 12%.
The Federal Reserve increased its benchmark interest rate by another 25 basis points on June 14, 2017—the second rate hike this year.
US utilities continue to trade higher as they approach a second and highly probable 2017 interest rate hike next week.
Treasury yields become more attractive when interest rates rise, making utilities less competitive than Treasuries in terms of yields.
Perhaps it was the exhaustion gap higher that followed the President Donald Trump’s speech, or maybe it was the building reality that there’s a disconnect between investor perception and the actual timeline of administration proposals. The president has said his administration is committed to a tax reform package by August. As I pointed out on Yahoo Finance’s Market Movers show on Friday, “Sure, it might be August, but it’s probably August 2018.” Even Senate Majority Leader Mitch McConnell has called the August timeline unrealistic.
Treasury yields (TLT) become more attractive when interest rates rise, making utilities (XLU) less competitive in terms of yields.
US utilities have been lagging the broader US equity market over the last several months, but we believe utilities’ recent underperformance has little to do with any change in sector-specific fundamentals. Rather, the industry is facing two headwinds ...
Stocks continued to inch higher despite confusion around the Fed minutes, weak markets in Europe and concerns mounting over key administration initiatives like tax reform. Year to date, utilities are up just shy of the S&P 500 ETF (SPY) 5.74% return. To date, traditional treasury ETFs, like iShares 20+ Year Treasury Bonds (TLT) have just been marking time, but iShares TIPS Bond Fund (TIP), utilities, REITS, and iShares S&P US Pref Stock Idx Fund (PFF) have been ripping off the lows—threatening to break out from weeks of consolidation.