Utilities

In late-summer 2010, we published a Special Report overviewing long-term U.S. equity sector relative performance during deflationary periods. Since then, inflation – core PCE deflator to be more specific – only briefly flirted with the Federal Reserve’s 2% target in mid-2018, while long-term…

Highlights China’s infrastructure investment growth rate could rebound moderately from its current nominal 3% pace, but will remain well below the double-digit rate it has registered for most of the past decade.  A lack of funding for local governments and their financing vehicles will…

Highlights Portfolio Strategy Macro headwinds, deficient demand along with rising chemicals stockpiles that have dealt a blow to industry pricing power warn that chemicals stocks are on the verge of a breakdown. Downgrade to a below benchmark allocation. At the margin deteriorating domestic…

Key Portfolio Highlights The S&P 500 has started 2019 with a bang as dovish cooing from the Fed has proven a tonic for equities. While we have not entirely retraced the path to the early-autumn highs, our strategy of staying cyclically exposed, based on our view of an absence of a…

  A playable market-neutral opportunity has resurfaced to buy materials at the expense of utilities stocks and in yesterday’s Weekly Report, we outline our top seven reasons why investors should put on this pair trade on a tactical (3-6 month) horizon. As noted in our previous Insight…

Highlights Portfolio Strategy We highlight our top seven reasons of why it pays to initiate a long materials/short utilities pair trade this week. Enticing long-term residential real estate prospects, a vibrant labor market, the recent improvement in house affordability, encouraging industry…

    Underweight The S&P utilities index has been on a roll recently as this fixed income proxy has reacted to the recent fall in Treasury yields (change in yields shown inverted, top panel) and jump in natural gas prices. Further, utilities are typically seen as a domestic…