US Fed on Alert - Preferred Shares Sector Review, Earnings: CU, EMA, H, RNW

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Markets have shifted into an inflationary mode. The betting is the virus chaos will keep central banks from reducing monetary accommodation, either from reducing bond buying or raising interest rates. The bond market is looking from a different angle, US 10 year bond yields jumped by an attention getting 34 basis points last week. This was negative for the interest sensitive names, including utilities.

The commodities enthusiasts think inflation is here for a while. Financial sector participants are seeing it both ways. The virus problems still matter, the US midterm elections are now visible on the horizon. It is an interesting state of affairs; a more in depth look is this week's topic. In addition to previous week's earnings reports for utility names, there are again 4 more earnings updates for utilities and more price change data for preferred shares and a list of top gainers from our coverage universe.

Earnings updates include Canadian Utilities Corp. (CU), Emera Inc.(EMA), Transalta Renewables Inc.(RNW) and Hydro One Ltd(H). This sector is positioned to benefit from increasing demand for electricity as an alternative to petroleum. The dividend yields range from 3.1% for TransAlta Renewables to 4.9% for Canadian Utilities Corp. The share prices were lower by an average of 3% last week, these names are interest sensitive.

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