Hot Money Takes a Break from Yield

With respect to equities, high yielding defensive names had actually become the hot money trade for much of the past six weeks. I had written several posts in the past week or two discussing how dangerously overbought that area of the market had become. Lo and behold, the staples and utilities in particular have come down with the senior indices recently, defying their traditional roles as safety havens-no-matter-what.

With that said, the defensive high yielders are still in a strong overall uptrend. I would view a pullback and successful hold of their respective 50 day moving averages to be excellent spots to entertain entry points. WIth yields falling in the bond market, investors seeings a decent return on capital with a margin of safety will likely continue to demand quality high yielding equities for the foreseeable future.

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