- Utilities (NYSEARCA:XLU) took the unusual position of leading all investor groups in today's trade, perhaps because the 10-year Treasury yield pulled back to 2.9% today after nearly hitting 2.95% early this morning, says Ben Levisohn at Barron's.
- Utilities have suffered their worst two-month return since 2009, notes Instinet's Frank Cappelleri, who says "extreme pullbacks like this since the 2009 lows led to bounces in the XLU" and that such moves often accompany a reversal in yields.
- Yields may not have much more room to run, says MKM Partners analyst Michael Darda, who thinks economic growth could be near a cyclical peak, which would hold the 10-year Treasury yield near 3%; if nominal GDP drops back below 4% in 2019, then the 10-year could fall to ~2.5%, making yield-sensitive groups such as utilities look attractive, Darda says.
- In today's trade: ETR +3.1%, AEE +2.9%, NEE +2.9%, PPL +2.7%, FE +2.6%, EXC +2.4%, SRE +2.4%, PCG +2.2%, SO +2.2%, DUK +2.1%, AEP +2.1%, PEG +2.1%, SCG +2%, WEC +1.9%, DTE +1.9%, ED +1.6%, D +1.4%, EIX +1.4%.
- ETFs: XLU, UTG, VPU, GUT, IDU, BUI, FUTY, RYU, UPW, FXU, SDP, FUGAX, JHMU, UTLF