The banks of the rich countries have increased the rating of the utility blocks in the Standard 500 index to “behave”. Against the background of the continued high valuation of some United States shares, this adjustment reflects the re-orientation of the organization towards a more volatile and stable distribution of cash flows.
Rating up to defense configuration.
The banks of the rich countries believe that the current market is more reliant on a small number of highly valued equities and that portfolio concentration has increased. Such risks can be somewhat diffused by the fact that the utility blocks are stable and demand is less volatile.
High valuation pressure remains the main line.
The bank noted that higher-valued equities were more likely to be subject to recall pressure if inflation remained high or interest rates were expected to adjust again. In contrast, the profits and cash flows of utility companies are generally more stable.
- Relatively stable sources of income
- Low economy-cycle sensitivity
- Increased access to finance when markets avoid risk
The plate wheel is talking about warming.
This judgement also shows that Wall Street attention to plate wheeling is increasing. With the expansion of popular equity, the position of the defensive plate in the asset allocation has again been highlighted.
Low-volatility blocks such as utilities may continue to attract additional inflows if subsequent inflation data, interest rate paths or expected changes in business profitability occur.