Market Update: February 2024
The market cap- and equal-weighted S&P 500 indices had a nice rally to end 2023. Much of this optimism was fueled by the expectation of multiple Federal Reserve interest rate cuts in 2024.
NextEra Energy Update; February 2024
NextEra Energy was once the clean and innovative center of the Southeast’s utility grid. And they still are. But over the last year, the stock market has repriced the value of NextEra Energy stock (NYSE: NEE). Prior to 2023, NextEra stock typically fetched a valuation premium over similar utilities because of a perceived higher growth rate on earnings as well as stability of earnings generation. Thus, as depicted below, throughout most of 2018-2022, NextEra stock had a higher price-to-book-value valuation that the other major utilities in the area. Source: [...]
Market Update: November 2023
The market (S&P 500) peaked in January 2022, then fell 25.3% over the next 10 months. But then it retraced those losses to the tune of 28.2%. The 10-year Treasury may be the catalyst.
The Debt Maturity Wall
The market movement over the last couple of months can really be summarized by one graph. In my humble opinion, this is the most important graph in all of finance right now and the market is just now starting to digest its implications. This is graph of the 10-year treasury bond yield that broke its multi-decade downward trading pattern back in 2022 and continues to rise here in 2023. Stocks and bonds, farms and businesses, homeowners and renters, credit card owners and issuers, student borrowers and universities, Congressmen and their [...]
Big Bifurcation: 10-year Treasury vs. Equal Weight Consumer Staples
Big bifurcation in momentum between the 10-year treasury yield (purple) and equal weight consumer staples (blue)! Staples are typically low volatility stocks with predictable earnings. But the rapid increase in the 10-year yield has forced a sell-off on both an absolute (top graph) and relative-to-S&P500 basis (bottom graph). Source: FactSet Research Systems. (n.d.). Equal weight consumer staples vs 10-year treasury yield benchmark (Interactive Charts). Retrieved October 12, 2023, from FactSet Database. This material is for informational or educational purposes only. Investing involves risk including the potential loss of principal. No [...]
NextEra Energy Update; September, 2023
NextEra Energy is selling off today, September 27th with a couple of news items in the headlines. Source: Factset Database, September 27, 2023 First, NextEra plans to sell Florida City Gas to Chesapeake Utilities Corporation (CPK) for $923 million in cash. NextEra will realize a gain on sale that should be immediately accretive to earnings and reduces debt loads by $145 million. Florida City Gas was an asset included in the Florida Gulf Power deal from Southern Company back in 2019. from This deal is expected to close over the [...]
Market Update: September 22, 2023
It appears that the market has started a correction over the last two months. Since last week, the market has fallen 4.2% - and 5.5% since the highs set at the end of July.
Market Update: September 8, 2023
The markets may experience rising volatility in the intermediate term, and it doesn’t appear that the rally we have enjoyed for the first half of the year will continue unabated.
Market Update: September 1, 2023
Not a whole lot has changed these last two weeks. During August, the market lost about 4.5% in value for the first 3 weeks of the month; though we’ve mostly recovered that in the last week.
Market Update: August 18, 2023
We’ve had a bit more volatility these last few weeks. Since reaching that peak on August 1, the market has declined about 4.5% peak-to-close of market on August 17 – quite graduallly.