For Clean Energy Stocks, It's All About Bond Yields Right Now

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The renewable energy sector has been able to claw back some losses thanks to falling treasure yields, but the prospect of another Fed rate hike keeps share prices suppressed

Renewable energy stocks have been badly pummeled, underperforming their fossil fuel peers and the broader market in the current year, with the selloff accelerating in recent months thanks to higher interest rates and a hawkish Fed outweighing considerable backing by the Biden administration. The iShares Global Clean Energy ETF NASDAQ

, the world’s largest green energy ETF and a catch-all bet on clean energy, has crashed 26.2% in the year-to-date, incomparable to the 14.5% gain by the S&P 500 over the timeframe and 3.9% return by the S&P Energy Sector Index. The solar and wind energy benchmarks have not fared any better, with Invesco Solar ETF NYSEARCATAN having cratered -31.4% YTD while First Trust Global Wind Energy ETF NYSEARCAFAN has declined -21.0%.

has gained 3.7% over the past five trading sessions, coinciding with a 21 bps decline in the 10-Year Treasury bond yield to 4.65%, the biggest fall in interest rates since August. Battered Solar And Hydrogen Stocks Rebound The solar sector has been particularly badly hit thanks to surging financing costs for panel installations as well as persistent supply chain disruptions stifling residential and corporate solar system orders through much of 2023.

 

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