Utilities look strong
Utilities continued their upward march last week and outperformed broader markets. The Utilities Select Sector SPDR ETF (XLU) rose 0.7%, while the S&P 500 fell more than 2% in the week ending March 8. The weak jobs report and indicators of a slowing global economy dented the market’s mood. The S&P 500 fell throughout the week. Utilities have risen 9% so far this year, marginally underperforming broader markets.
The benchmark ten-year Treasury yield trended lower and fell to 2.63% last week. Utility stocks and Treasury yields generally trade inversely.
Movers and shakers
Renewables titan NextEra Energy (NEE) rose 0.6%, while regulated utility giant Southern Company (SO) gained 1.8% last week. Both these utility stocks hit their new respective 52-week highs last week. The second largest utility by market cap, Duke Energy (DUK) stock rose 0.8%, and Dominion Energy (D) rose 1.3% during the week.
PG&E (PCG) continued its uptrend last week. It rose more than 8%. According to the Wall Street Journal, PG&E has requested the bankruptcy court a sanction to pay around $350 million as performance bonuses to employees in 2019. Interestingly, the utility had canceled $130 million of performance bonuses for 2018 late last month considering the sufferings of the wildfire victims.
Merchant power player NRG Energy (NRG) stock fell 1.8%, while AES Corporation (AES) stock rose more than 1% last week. AES, the top gainer among S&P 500 Utilities, recorded its 52-week high last week.