Dividends: corporate America's gift to investors.
Companies in the S&P 500 Index will increase dividends paid to investors this year by 12.3 percent to a total of $323 billion, according to data from Strategas Research Partners founder Jason Trennert. These distributions represent about a third of total net income earned by companies in the index. Even more impressive, dividend growth since WWII has outpaced inflation five-fold (6,000 percent compared to 1,100 percent).Read more »
The U.S. dollar-yen exchange rate has risen 8 percent since mid-July and now trades at a six-year high. Japanese stocks have risen too. As every dollar buys increasingly more yen, Japanese products become cheaper in America and Japanese companies sell more.
Credit policymakers at the Bank of Japan for the dual surge. They are pumping 60 trillion yen ($550 billion) a year into the economy in hopes of stoking growth, as real gross domestic product fell 0.1 percent in the second quarter compared to last year.Read more »
The U.S. Dollar Index (DXY) has risen for 11 consecutive weeks. Today it's hitting a four-year high.
The index measures the dollar against a basket of six major currencies, with the euro representing 57 percent of the calculation (other components include the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc). Its strength underscores faster U.S. economic growth on a relative basis, especially versus Europe and Japan where central bankers have announced plans to increase stimulus.Read more »
Bears, big bets and heavy metal.
The volume of outstanding silver futures contracts traded on the Comex has risen to a six-year high, as prices drop below the key support level of $19 an ounce. The front-month futures contract has fallen another 1 percent today, and now trades at its lowest level in four years. Bears are pushing their shorts. Heavy metal indeed.Read more »
"Take two aspirin and call me in the morning."
If only the pain of investing in small-cap stocks this year were so easily remedied. Comparing their performance to the gains posted by the largest companies, our throbbing headache has morphed into full-blown schizophrenia. The Russell 2000 Index of companies with market capitalizations averaging less than $2 billion lags the S&P 100 Index of largest companies by a stunning 1,112 basis points this year. (A basis point is 0.01 percentage points.) Oh, the pain.Read more »
China's Lou Jiwei stunned fellow G-20 finance ministers gathered in Cairns, Australia this weekend. In response to China's foreign direct investment falling to a four-year low, he commented: "China will not make major policy adjustments due to changes in any one economic indicator."
Wait... Are China's central planners relaxing their grip?Read more »
Today we separate the emotion behind Scotland's independence vote from the reality underpinning Britain's economy.
Starting with emotion, the British pound has fallen 4.5 percent since June 30, nearly as much as the beleaguered euro.
The British pound has fallen even as economic indicators have improved. Since June 30, the Citigroup U.K. Economic Surprise Index has risen from near a 13-month low to a 3-month high. By contrast, Citigroup's euro zone equivalent still hovers near a 15-month low. In other words, U.K. data has generally surpassed economists' forecast; euro zone data has not.
Tomorrow's $21.8 billion initial public offering by Chinese e-commerce giant Alibaba Group Holding Ltd. (BABA) is casting quite a shadow on Wall Street. Underwriters closed the books after just two days of marketing, for what will likely prove the largest IPO in U.S history.
Large institutional investors looking to buy shares have been selling other Internet holdings in order to raise cash and make funds available, as recent performance makes clear. Whereas the S&P 500 Index has rallied for the past five trading days, the Nasdaq Internet Index has posted a loss. We call it a "Tale of Two Markets."Read more »
Would you rather be a borrower or a lender?
We pose the question as the national average rate for a 30-year fixed mortgage still hovers near record lows at 4.19 percent, according to bankrate.com. All things being equal, this simple fact steers us towards wanting to borrow. Money is cheap.Read more »