NO, I'm not asking you what the definition of "cap and trade" is, I'm telling you it's meaningless. It might as well be "cap and gown", or "bust a cap", because it has absolutely no effect on the price of the EXC. Once again... it's a yield play. We are in a low growth, low interest rate environment, and it is expected to stay that way for quite a while, hence the catchphrase...the New Normal. Utilities seem to make sense, because they are yielding 5-6%. Utilities are de facto treasuries or at least like preferred stock or corporates, and should be treated accordingly. So, it doesn't matter one iota about what the environmentalists are saying. Gross is buying utilities because they are yielding more than treasuries, are taxed less, and are less sensitive to inflation, and in the long run should outperform equities because of the New Normal's status quo.
I guess this all makes sense if you are looking to park cash for a long period of time. But if capital is allegedly flowing into utilities, why are they getting killed. Past 12 months SPX is up about 35%, while XLU is only up 5%. That's called under performance or poor relative strength. In addition, XLU has already taken out the major support trend-line off the March lows and given up its 200MA. So the bears appear to still be in control. If you are looking at it as a trade, I'd look elsewhere.
Bottom line, is you first have to ask yourself if you want to be long equities in the first place, and if you do, what sectors, and what stocks are the strongest, and give you the highest probability of making money in the near term.
Stocks go up, because there are large amounts of capital flowing into the market, the sector, and then the stock, and there is usually a motive or "rationale" for the capital to be flowing there.
Forget about cap and trade, and green tech, and whatever else you are reading on the internet, and especially forget about what you read from the "anal"ysts. Learn to listen to what the market is telling you instead, and you will be much better off.
AI
Market Data 
Markets 
