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Heinz, RE: Utilities
In my opinion, a "safe haven" during down broad markets. If you look at utility stocks from July-Ocotober, 1998, when market was weak, utilities were solid then.
One note of caution - the strength of the utilities during that prior period could have been a precursor to fed easing of interest rates, which took place during that period of 1998. As you know, utilities carry large debt and are interest rate sensitive. The interest rate environment and outlook may not be the same today.
Of course, one could also argue that if the market continues to weaken, fed may go neutral, and then again, one could also argue that with inverted rate curve in play, economy looks to weaken and rate action by fed also will not be necessary.
Best wishes always,
David |
