News of the coronavirus spreading further in the last 24 hours has sent a risk-off attitude throughout markets.  One result of these moves has been a more distinct breakout of treasury yields as the 20+ Year Treasury ETF (TLT) has broken out of the downtrend that it has been in since the summer.  At its current levels today, it is now at its highest level since October.

TLT is not the only ETF to have benefitted from a more risk-averse sentiment.  As of this writing, Utilities (XLU) is the only sector ETF looking to close higher today.  XLU’s rally hasn’t just been confined to today either.  With interest rates falling, Utilities (XLU) have gone on an absolute tear recently.  Since eclipsing its prior high just below $65 a little over a week ago, XLU has rallied roughly 5%.

Given this massive rally, breadth has been extremely strong. Now at 70.5, the 10-day advance/decline line has become very stretched.  In fact, it is very rare to see these levels in the Utilities sector’s 10-day A/D line as there has only been one other period since 1990 that it was higher (June 2017) when it reached 72.14. Start a two-week free trial to Bespoke Institutional to access our Morning Lineup and Closer which will also grant access to our Daily Sector Snapshot.

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