XLU: Utility Dividend Spread To Treasuries Is Too Low, Creating Overvaluation Risk
Summary
XLU's dividend is a tiny 2.65% today, with its spread to Treasuries seemingly bouncing off long-term lows. The stagnatio...
XLU's dividend is a tiny 2.65% today, with its spread to Treasuries seemingly bouncing off long-term lows. The stagnation in gold's price indicates that investor appetite for "monetary devaluation hedges" is slowing, impacting real interest rate proxies like utilities. In the short-term, deflation may be a greater risk than inflation, but as in 2020, I expect the Fed will shift too dovish, due to debt concerns.