Stock Market Meltdown for Bond Proxies in Worst Week Since April

2016-09-29 00:00:00.0   |   External Site

Increasingly hawkish Federal Reserve rhetoric is making a bad stretch worse for stocks investors fell in love with for their high dividends.

Utilities dropped for a fifth straight day Thursday, leaving them poised for the worst week since April. Real estate and consumer staples shares were also in retreat as the odds for higher interest rates this year pushed past 55 percent. The S&P 500 fell 0.9 percent to 2,152.27 at 1:22 p.m. in New York, with financial shares joining the retreat amid growing concern that Deutsche Bank AG’s woes could spread.

Losses for companies broadly defined as bond surrogates mark a continuation of a trend that’s held since the middle of the year, when utilities, drugmakers, real-estate and staples shares began to weaken. An exacerbating influence is the relative size of the industries: according to Ned Davis Research, stocks in the category trade with a higher market capitalization compared to industries like banks than any time since the bull market began in March 2009. Read more...

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