It hasn’t been a great year for investors to own stocks in the utilities sector – the worst-performing part of the U.S. stock market so far in 2023 – but that could be coming to an end.
Corporate distress is on the rise due to higher interest rates, but companies also recently earned a record amount on cash, Treasury and agency debt holdings, according to Guggenheim Investments.
Retail investors are reportedly treating them like lottery tickets. Large funds are using them to tactically shield their portfolios from potential hazards. Sophisticated traders are using them to siphon profits from daily market swings.
A bout of small-cap underperformance in the face of renewed “higher-for-longer” rate expectations sees the benchmark Russell 2000 finish below important support.
Inflation is likely to fall below the Federal Reserve’s 2% annual target by late next year, says David Kelly, chief global strategist at JP Morgan Asset Management.