Barron's Streetwise Wildfires and Utility Stocks. Plus, Merrill’s Investment Chief.
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Feb 21, 2025 Patti Poppe, CEO of Pacific Gas and Electric, discusses strategies for reducing wildfire risks and how AI plays a role in enhancing utility resilience. Chris Hyzy, Chief Investment Officer at BofA Private Bank and Merrill, shares insights on current market trends and investment strategies, emphasizing the rise of passive investing. They analyze the implications of increased electricity costs and the shifting dynamics of the S&P 500, offering listeners valuable advice on navigating today's complex financial landscape.
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California Wildfire Fund Impact
- PG&E's stock decline is linked to the California Wildfire Fund and investor concerns about its depletion.
- The fund covers wildfire liabilities, impacting utilities even if they aren't directly responsible for the fires.
PG&E Stock Performance
- PG&E stock is down 22% year-to-date, compared to a 5% increase for the S&P 500.
- Utility stocks are generally performing well due to their association with AI and data centers.
Investor Concerns
- Investors are concerned about wildfire risk and its financial impact on utilities.
- California has a unique wildfire fund to compensate victims but its depletion worries investors.