Utilities: Where the Real Havens Are

From shuttered schools and cancelled events to disrupted supply chains, it looks like COVID-19—the coronavirus—is only starting to wreak havoc on the global economy. The big questions for investors: Where will the blows hit hardest and what if anything will be spared.

The market’s wild recent action is basically from bets being placed on the answers. So far, US Treasury bonds are in the winners’ circle. The yield on 10-year notes slipped to just 66 basis points at one time last week.

In contrast, anything to do with oil and gas has sold off hard. That’s even though most sector stocks were already trading at depression-level prices, despite generally solid Q4 numbers.

Most investors still seem undecided on prospects for the vast majority of the nearly 200 essential services stocks in our Utility Report Card coverage universe. That includes much of our model portfolio, of which a handful of stocks actually made new all-time highs last week.