Oil & Gas - Energy - Commodities - Resources (OILBRENT)

[eFinanceMarkets]

$XLU Utilities (NYSEARCA:XLU) took the unusual position of leading all investor groups in today's trade, perhaps because the 10-year Treasury yield pulled back to 2.9% today after nearly hitting 2.95% early this morning, says Ben Levisohn at Barron's.

Utilities have suffered their worst two-month return since 2009, notes Instinet's Frank Cappelleri, who says "extreme pullbacks like this since the 2009 lows led to bounces in the XLU" and that such moves often accompany a reversal in yields.

Yields may not have much more room to run, says MKM Partners analyst Michael Darda, who thinks economic growth could be near a cyclical peak, which would hold the 10-year Treasury yield near 3%; if nominal GDP drops back below 4% in 2019, then the 10-year could fall to ~2.5%, making yield-sensitive groups such as utilities look attractive, Darda says.