Utilities are having their best rally in decades , propelled by artificial intelligence enthusiasm and the prospect of lower interest rates, but some investors are cooling on the sector. Rate-sensitive utilities are now the best-performing sector in the S & P 500 in 2024, jumping more than 28%. The sector is on pace for its best year since 2000, when it climbed more than 50%.
However, there are indications the utilities trade may be getting too hot. The sector is now trading 20% above its 200-day moving average. The only other time this trend has occurred was for a single day in October 2000, according to SentimenTrader founder Jason Goepfert. Kathryn Rooney Vera, StoneX chief market strategist, said Thursday on CNBC's "Squawk Box" that while utilities were her top pick coming into 2024, she is now looking elsewhere in the market for opportunities.