The Intermarket Utility
Things keep changing as times change. Conventional intermarket tells us a few characteristics about utility sectors. First it belongs to the late economic sector. Second bond prices and utility stocks usually trend in the same direction. They peaked together in late 1993 and bottomed together in late. In a climate of falling bond prices, utilities are often among the stocks that suffer the greatest damage.
Third, because of the perceived utility and bond link, even utilities are assumed to have a connection with commodities like copper. At the start of 1995, the peak in copper prices coincided with an important bottom in bond prices. The CRB/bond ratio turned up in late 1993 and continued to rise for almost a year. This was during a period of time when copper stocks rose and utilities tumbled.
Visiting markets from 1995 onwards…
This article was written forĀ ATMA.
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