A Positive Environment For XLU

MacroGirl
1.62K Followers

Summary

  • The utilities sector (represented by XLU) has been outperforming in 2024.
  • XLU is expected to benefit from a moderate risk-off environment, leading to sector rotation.
  • Steady earnings growth, rising distributions, an attractive valuation and the prospect of lower rates are all potential tailwinds. The chart has a bullish pattern and a target price of $77.
Workers at underground gas storage plant

Monty Rakusen

The corrective phase in the stock market may have started in Q2, but there were red flags beforehand in Q1. Yields were climbing, the rally was slowing, and sector performance was reflecting a more risk-off environment.

One of the sectors

This article was written by

1.62K Followers
My approach is long-term and I focus on investing in macro ideas through low risk ETFs and CEFs. I have traded stocks and currencies for nearly ten years and currently run a family fund with my partner and fellow SA contributor Andrew McElroy. I also invest in real estate and am a freelance writer and contributor to Matrixtrade.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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