With the steep fall on March 22, the S&P 500 lost more than 0.7% on a weekly basis, while utilities continued to gain. The Utilities Select Sector SPDR ETF (XLU) rose 0.5% for the week ending March 22. Renewed tensions in the US-China trade war and the slowing global economy caused the steepest fall in the broader markets since January. So far this year, the S&P 500 has risen ~12%, while utilities at large have risen more than 10%.
Treasury yields and utility stocks usually move opposite to each other. The ten-year Treasury yield trended sharply lower and closed at 2.44% last week—lower than the three-month Treasury yield. When the long-term debt yields less than the short-term debt, it’s called a “yield inversion,” which might point to a recession. Concerns about a recession could move investors to safe-haven investments like utilities.
Leader and laggards
Southern Company (SO) closed marginally up last week. Last week, US Secretary of Energy Rick Perry announced up to $3.7 billion in loan guarantees to continue constructing the Vogtle nuclear power plant. The plant is years behind the schedule. The cost has doubled the initial estimate.
Dominion Energy (D) and PPL (PPL) were among the top losses last week. They lost almost 2% each.
Currently, PPL (PPL) is trading at a forward PE ratio of 13x based on analysts’ EPS estimates for the next 12 months.
After opening on a bearish note on Wednesday, Tesla (TSLA) was trading with 4.8% losses for the day, near $195.25 at 1:16 PM ET.
With voting conducted in seven phases panning six weeks, India’s (EPI) elections have been a grand affair—to say the least. Tomorrow is the day of the results.
Qualcomm (QCOM) stock fell more than 10% in the first half of trading on May 22 after it lost its licensing lawsuit with the US FTC (Federal Trade Commission).
Apple (AAPL) suffered a setback recently when the US Supreme Court allowed an antitrust lawsuit against the company to proceed.
Today doesn’t seem to be a good day for electric vehicle companies. Earlier today, NIO stock hit an all-time low of $4.00.
The cannabis sector has been struggling to find direction on May 22, with cannabis stocks trading on a largely mixed note in the first half.