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In the exchange-traded funds (ETFs) world, the Utilities Select Sector SPDR Fund NYSE: XLU demonstrates a notable bullish setup. The XLU is now up almost 12% year-to-date, consolidating in a bullish wedge just under 3% away from its 52-week high and trading above all major moving averages.
Utility stocks have underperformed the market recently due to rising interest rates. However, there are three major macro factors that are likely going to push utilities higher relative to the broader market moving forward. We discuss the ramifications for The Utilities Select Sector SPDR® Fund ETF, as well as some of our top picks of the moment in the utilities space.
We have highlighted five trends that may influence the market in the rest of the year.
The XLU portfolio has a substantial negative FCF estimated for the next two years of over US$14bn per year. High capex requirements for capacity expansion may lead to increased debt, reduced dividends, or capital raises for XLU holdings. Portfolio consensus price target upside potential of 9% seems reasonable, barring dividend cuts.
CNBC's Pippa Stevens reports on news regarding beneficiaries of record heat across the United States.
The philosopher Nietzsche developed the concept of “eternal recurrence,” or that our lives will repeat infinitely. A look at the utilities sector might bear out the truth of this.
Utility is one of the hottest plays this year, driven by the artificial intelligence (AI) frenzy, and is outperforming the broad market index. Investors seeking to make the most of the next leg in the AI industrial revolution could consider utility ETFs.
Interest rates, inflation, and geopolitical uncertainty all pose their own challenges to investors. Perhaps one of the most concerning, however, may be concentration risk.
Launched on 12/16/1998, the Utilities Select Sector SPDR ETF (XLU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.
The Fed may cut rates in September, This expectation may charge up the markets in June.