It’s tough to outperform at all when you’re mired in a protracted downtrend. The Utes are stuck on the left side of the weekly Relative Rotation Graph, alternating between the ‘Lagging’ and ‘Improving’ quadrants, but never reaching the ‘Leading’ one.

It’s a trend that’s been in place for the last 15 years.

There is perhaps no sector which exemplifies ‘risk-off’ more than Utilities. No sector has more consistent earnings, thanks to business which are highly regulated and rely heavily on long-term contracts. The Utilities also tend to pay large, stable dividends. These characteristics make them attractive places for investors to hide during economic turbulence (real or imagined).

Unsurprisingly, the sector outperformed during 2022, when US stocks were in the midst of their first extended bear market in more than a decade. The Utes were actually setting new all-time highs back in September, while the rest of the market was still drifting downward toward the ultimate lows in October.

The sector has been left behind since then, though. This week, the group dropped to its lowest level of the year, breaking a key level of support that’s been in place since 2021.

There is perhaps no sector which exemplifies ‘risk-off’ more than Utilities. No sector has more consistent earnings, thanks to business which are highly regulated and rely heavily on long-term contracts. The Utilities also tend to pay large, stable dividends. These characteristics make them attractive places for investors to hide during economic turbulence (real or imagined).

Unsurprisingly, the sector outperformed during 2022, when US stocks were in the midst of their first extended bear market in more than a decade. But that bear market is a thing of the past. Utilities set their relative peak last October and have disappointed ever since.

There is perhaps no sector which exemplifies ‘risk-off’ more than Utilities. No sector has more consistent earnings, thanks to business which are highly regulated and rely heavily on long-term contracts. The Utilities also tend to pay large, stable dividends. These characteristics make them attractive places for investors to hide during economic turbulence (real or imagined).

Unsurprisingly, the sector outperformed during 2022, when US stocks were in the midst of their first extended bear market in more than a decade. But that bear market is a thing of the past. Utilities set their relative peak last October and have disappointed ever since.

The Utilities sector has battled Financials all year for the last place trophy. It might finally be time for a relief rally.

Losses in the Utilities sector have been outpaced by only the Financials so far this year.