🤏 not so safe haven
🤏 no longer safe
utilities are traditionally a safe haven
ref: what i wrote about XLU 0.00 (the utilities sector etf) back in august
utilities (we're talking big tickers like DUK 0.00, D 0.00, and NEE 0.00) are usually the last to slide or free fall in the midst of market downturns
these companies collect stable, steady checks from us
now the worst sector
in the past month, tility stocks have been the "worst-performing sector of the s&p500, down 13%" as opposed to the broad 4% decline in the market
one could say that all that accelerated inflow into utility stocks throughout this year is beginning to unravel
unsurprisingly, the reason is: rates
the us 10-year treasury yield is ~4.084% as of writing
meaning, if one buys this bond and holds till maturity, given that the market almost always considers us treasuries risk-free, it’ll give you a near-4% yield with no risk in consideration
it’s a no brainer that this gives better yields than a 3.2% yield (dividend rate for utilities) if we’re not considering the potential upside of the price of utility stocks themselves
happy wednesday!
💡 something im thinking about
that's all, folks 🐒
