If anything, these tensions have worsened. Nonetheless, the S&P 500 is higher by 3.3 percent, while the benchmark 10-year Treasury note yield is lower by roughly 33 basis points, the Dow Jones Utility Average is up 34 basis points and the Bloomberg North American REIT Index is higher by 75 basis points.
Benchmark oil prices are still being knocked around by the embargo of Iranian oil, the implosion of Venezuelan production and US pressure on the rest of the world to ramp up output. But while oil is down from a July 3 high of over $75 per barrel, the Alerian MLP Index is higher by 1.74 percent while the producer-focused S&P 500 Energy Index is up 1.3 percent.
The bottom line is nothing has happened to shift the cautiously optimistic view we again highlighted in the July issue of Conrad’s Utility Investor. That includes our three-step strategy: Weed out weaker names, build a cash reserve by taking profits on the highest flyers and boost positions in stocks that retreat to bargain valuations.
Like most of the market, the majority of Portfolio stocks have been in a holding pattern so far in July, as investors await calendar second quarter results and guidance updates. What has happened, however, has generally underscored strength of recommendations, while enforcing our caution on the 20 members of our Endangered Dividends List.
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