Utilities beat broader markets
The broader market sell-off intensified last week. Most of the major indices recorded the worst week in a decade. Utilities continued to beat equities at large. The Utilities Select Sector SPDR ETF (XLU), the representative of the biggest utilities in the country, fell more than 5%, while the S&P 500 fell almost 8% for the week ending December 21.
Bond king Jeffery Gundlach’s comments about the markets making new lows tarnished the sentiment early last week, which was followed by a quarter-point rate hike by the Fed. Continued weakness in the energy sector and concerns about the US government shutdown dented the markets.
Last week, the quarter-point rate hike from the Fed was the fourth hike in 2018—the most hikes since rate normalization started in December 2015. The benchmark ten-year Treasury yield trended lower and closed at 2.79%. Treasury yields and utilities usually trade inversely to each other.
Sell-off all over
PG&E (PCG) was among the top losses last week. PG&E fell more than 12%. According to Reuters, the California Public Utilities Commission has ordered immediate action against PG&E for falsifying safety documents for its natural gas pipelines.
NRG Energy (NRG), one of the top gainers in 2018, also fell 12%. National Grid (NGG) fell 7%, while Consolidated Edison (ED) fell almost 5% last week.