The Exchange · Sep 24, 2026
With Jeff Kilburg, Founder and Portfolio Manager at KKM Financial
The energy sector is up about 40% this year and utilities are down about 7%, Jeff Kilburg said, and he sees that gap as the opportunity.
Utilities fell more than 3% in a week as bond yields rose, the worst of any sector. Kilburg was looking to buy, naming Duke Energy and NextEra, on the view that an end to the Iran war and less talk of rate increases would bring the sector back.
"If you see a little bit of reprieve — in less conversations about having three rate hikes next year — that's where utilities come back to life."
Jeff Kilburg, founder and portfolio manager at KKM Financial and a CNBC contributor, on CNBC's The Exchange, came on to talk about where he is bargain hunting.
The full segment is covered here so you can skip it.
Here are the 3 calls that matter.
Key Takeaways
Utilities are down about 7% this year while energy is up about 40%, and he is looking at Duke Energy and NextEra
An end to the Iran war would bring utilities back, along with less talk of three rate hikes next year
Stocks have risen about 30% since November 2024 even as the 10-year yield rose
Third-quarter earnings are projected to grow 25% from a year earlier
1. Utilities vs Energy
The host said utilities were down more than 3% for the week, the worst sector, under pressure from rising bond yields. Before bringing him in she joked that her own bargain hunting now starts by asking Meta's Muse assistant.
He said he did not know if Muse would suggest this trade. With the two-year Treasury note above 4% and the 10-year above 5%, at 5.15%, he said it is time to look at utilities, naming Duke Energy and NextEra, which he said is twice Duke's size.
Energy has led all year while utilities have fallen
He described it as a dislocation between sectors: the energy sector ETF (XLE) has led all year, up about 40%, while the utilities ETF (XLU) is down about 7%.
"So I think there is opportunity when you do see us get out of this Iranian war" — Jeff Kilburg
