The hottest trade of the year

A lot of folks might think tech stocks have led the market higher this year. But they'd be wrong. In fact, one "boring" sector has claimed the top spot. And that's something to watch in the final months of the year. [Header]( The Hottest Trade of the Year Dear reader, If you ask anyone what sector has led the market higher this year, I’d bet they’d say technology stocks or maybe even the artificial intelligence (AI) sector. But they’d be wrong... The tech sector was up nearly 25% in mid-July. But since then, it has pulled back along with the rest of the market. The Technology Select Sector SPDR Fund (XLK) is only up 8% year to date. Instead, “boring” sectors like consumer staples and utilities have taken the top spots. Check it out… [MMI sep 10]Utilities are leading the way right now – up more than 20% year to date. And if it can maintain this lead, it would only be the third time since 2014 that the sector manages to end the year with a gain of at least 20%. There are a couple reasons why this normally conservative sector is attracting big money right now… First, interest rates are playing an important role. The yield on the 10-year U.S. Treasury is now down to 3.7% from a high of nearly 5% last year. And with the Federal Reserve set to begin lowering interest rates next week, the yield will likely continue to fall. Utilities are currently paying an average dividend yield of about 3% today. And as the yield on Treasuries fall, these dividends become more attractive. Second, the AI boom has increased demand for electrical power. More and more data centers are being built to handle the increased energy demand to power the AI boom. And that’s good news for utilities. The electricity demand in the U.S. has been flat for a decade. Now, that figure is estimated to grow… Some experts believe we could see an increase in the low to mid-single digits annually in the next 10 years. And that growth will lead to a surge of investment opportunities – from transmission lines to transformers to the utilities that actually provide electricity. Right now, the utility sector is a little overvalued based on historical numbers. But that doesn’t mean it can’t continue its current uptrend. Remember, this sector hasn’t seen this kind of demand for years... So that could explain it trading at 18 times future earnings, though it’s still about 15% below the valuation of the overall S&P 500. So, in the meantime, I suggest building out a basket of AI/Utility stocks. They’ll stand to benefit the most as demand continues to surge for utility companies in the years to come. Here’s to the future, [Matt McCall signature] Matt McCall Editor, Market Insights Check Out My Latest Podcast [STEP15](It’s time to do something new and exciting. Tim Bohen and I are taking your questions live on the air. We’ve been in this game a long time. And we want to share our knowledge with you on [this episode of the SteadyTrade Podcast](. We cover a lot on this episode. We talk about what type of trading an investor with a full-time job should consider... We discuss a topic that has to do with the increase in the minimum wage... And we share three “island stock” picks you might want to consider owning in the years to come. [Click here to learn more](. © Centurion Publishing 13809 Research Blvd, Suite 500, Austin, TX 78750 [CenturionPub.com]( *Results are not typical. Past performance does not indicate future results. All investing carries risk. Our Privacy Policy, along with our Term & Conditions, governs your use of this site. By using our site, or by accepting the Terms of Use (via opt-in, checkbox, pop-up, or clicking an email link confirming the same), you agree to be bound by our Terms & Conditions and our Privacy Policy. If you have provided personal, billing, or other voluntarily provided information, you may access, review, and make changes to it via instructions found on the Website or by replying to this email. To manage your receipt of marketing and non-transactional communications, you may unsubscribe by clicking the “unsubscribe” link located on the bottom of any marketing email. Emails related to the purchase or delivery of orders are provided automatically – Customers are not able to opt out of transactional emails. We will try to accommodate any requests related to the management of Personal Information in a timely manner. However, it is not always possible to completely remove or modify information in our databases (for example, if we have a legal obligation to keep it for certain timeframes, for example).If you have any questions, simply reply to this email or visit our website []( to view our official policies. To Unsubscribe [Click Here](