A humorous look at the companies that caught our eye, for better or worse, this week
The nice thing about dividend-paying utilities is that they’re extremely safe stocks that perform exceptionally well in all sorts of market conditions. And if you believe that, we’ve got some shares of Canadian Utilities to sell you. With bond yields surging after the Fed signalled that it will likely taper its stimulus program later this year, interest-sensitive stocks such as utilities, pipeline and telecoms bore the brunt of the market selloff. Hey, who turned off the lights?
June 21 close: $35.14, down $2.47 or 6.6% over week
Fed governor No. 1: The housing industry is finally rebounding.
Fed governor No. 2: Yes, and home builders’ stocks have been surging.
Fed governor No. 1: I’ve got a hilarious gag: Let’s start raising interest rates!
Fed governor No. 2: And crush any optimism people had!
Fed governor No. 1: Brilliant!
June 21 close: $18.81 (U.S.), down $2.05 or 9.8% over week
For years, owning Manulife was about as much fun as being the target of a life insurance hit. But now, it’s like you’re the guy collecting on the hit. Okay, maybe not the best analogy. Anyway, after seeing their bottom lines hammered mercilessly by low interest rates, life insurers are suddenly one of the few bright spots in the market now that long-term bond yields have started rising. Sure beats a murder rap.
June 21 close: $16.72, up 99¢ or 6.3% over week
Understanding Markets – A Beginner’s Guide:
Index investing is an excellent strategy because, when the market plunges, your losses aren’t concentrated in one sector. Instead, they are spread across many, many sectors. For example, whether you own real estate investment trusts, utilities, materials or energy, you got clobbered this week as bond yields jumped, giving you the full benefit of diversification.
June 21 close: 11,995.66, down 191.70 or 1.6% over week
You know when you toss your favourite shirt into the dryer on “high,” and it comes out the size of something a Cabbage Patch Kid would wear? Now you know how Whirlpool shareholders feel. Brian Sozzi, a strategist with Belus Capital Advisors, warned in a report this week that higher interest rates could affect demand for appliances, causing Whirlpool’s stock to shrink a few sizes.
June 21 close: $113.32 (U.S.), down $15.92 or 12.3% over week