BTIG: Water utilities lead sector as electric names decline in July

Investing.com -- Utilities fell in July, with the sector underperforming the S&P 500 by about 150 basis points for the month, according to a BTIG report released Monday. The S&P 500 continues to outpace the UTY by roughly 470 basis points year-to-date.

Water and gas utilities outperformed in July, each gaining over 200 basis points during the month. Water names have performed well this year, gaining nearly 12% year-to-date. Electric utilities declined 3.40% and were the worst performers for the month.

Chesapeake Utilities (NYSE: CPK) was the top performer, gaining about 8.41% and outperforming the UTY by roughly 10%. BTIG views this as largely driven by its FEP project announcement and the gas utilities recovery. Spire (NYSE: SR) also outperformed, gaining approximately 2.27%. Both companies reversed from being the worst underperformers in June.

Names with exposure to large load appeared to face the most pressure. American Electric Power (NASDAQ: AEP) was the worst performer in BTIG's coverage, declining about 6.55% and underperforming the UTY by roughly 490 basis points. Entergy (NYSE: ETR) and IDACORP (NYSE: IDA) were also among the worst performers.

The 10-year Treasury yield rose 23 basis points in July and is up over 50 basis points year-to-date. BTIG noted that rising rates could have implications on the large load build cycle.

The firm will monitor rate cases for Duke Energy (NYSE: DUK), with potential orders in the DEC case and hearings in the DEP case beginning on Aug. 11. Batch Zero progress will be important, with AEP, CenterPoint (NYSE: CNP) and Sempra (NYSE: SRE) receiving notifications of load classifications on Aug. 7.

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