In today\u2019s Steady Investor, we highlight some key events and market forces that are shaping the financial landscape, including:<\/p>\n\n\n\n
The Best Year-To-Date Performing Sector Isn\u2019t Technology \u2013 <\/strong>For all the press that high-flying mega-cap technology stocks get\u2014particularly in light of the rapid AI buildout\u2014the Technology sector is not even the best-performing sector in the S&P 500 this year. It\u2019s Utilities. As of this writing, Utility stocks are up just over 20% for the year, slightly higher than technology stocks and better than the broad S&P 500 index. Utility companies are generally seen as defensive stocks, given the relatively unexciting, but stable, earnings and dividend payments of gas and electric providers across the U.S. However, Utilities also tend to be adversely impacted by higher interest rates, which helps explain the -10% decline logged in 2023. The outlook for lower rates in the future has helped boost Utility shares in 2024. Still, investors have also been optimistic about another key factor that could help Utility companies: surging demand. Some investors see the artificial intelligence revolution as a major new revenue source for Utility companies, as AI requires enormous amounts of computing power, which involves a lot of electricity. If the proliferation of AI infrastructure, tools, and companies takes hold as many anticipate it will, power demand could grow significantly as well. By some estimates, electricity demand from data centers alone could grow by 15% annually over the next decade. This has been good for Utility powers, but investors should keep in mind that increasing power demand does not necessarily mean increasing earnings. If forecasts for power demand and electricity consumption are all correct, Utilities will likely need to make significant investments in expanding the power grid and developing more energy infrastructure, generation, and transmission. This can get costly fast, and a potentially higher-for-longer interest rate environment could cloud the economics of scaling.1<\/sup><\/p>\n\n\n\n Key Strategies for Thriving in a Volatile Market<\/a><\/u><\/strong><\/p>\n\n\n\n Daily market swings can leave investors uneasy, but waiting for stability could mean missing out on valuable opportunities.<\/p>\n\n\n\n Rather than being caught off guard, it\u2019s essential to understand how volatility can work in your favor. In our guide, \u201cUsing Market Volatility to Your Advantage<\/a><\/u><\/em><\/strong>\u201d, all readers will have access to our insights, based on decades of experience, on how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time.<\/p>\n\n\n\n