“S&P 500 companies slashed or suspended over $40 billion in dividends in the second quarter, the deepest quarterly drop since 2009.” (Dow Jones)
“Second-quarter global dividends plunged by $108 billion, or 22%, as companies scrambled to save cash during the pandemic.” (Reuters)
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Market Indexes: It was the 3rd straight down week for the market, with the Tech sector pulling back again, down -9%. However, the Russell small caps had a good week, up 2.78%
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Volatility: The VIX fell 3.9% this week, ending at $25.84, but remains at a high level vs. previous years.
High Dividend Stocks: These high dividend stocks go ex-dividend next week: LTC, GAIN, GLAD, LAND, STX, GMRE, PM, SUNS, PBA, CM.
Market Breadth: 16 out of 30 DOW stocks rose this week, vs. 7 last week. 60% of the S&P 500 rose, vs. 27% last week.
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Economic News: “Wall Street’s main indexes fell on Thursday after data showed high levels of weekly jobless claims, while technology-related stocks resumed their slide with Apple and Amazon.com Inc among the biggest drags on the Nasdaq.”
“Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — and will tolerate periods of higher inflation as they try to revive the labor market and economy, based on their September policy statement and economic projections released Wednesday.
The announcement codifies that the Fed chair, Jerome H. Powell, and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.
The policy setting Federal Open Market Committee “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” officials said in their statement.
“Effectively, we’re saying rates will remain highly accommodative until the economy is far along in its recovery,” Mr. Powell said at a news conference following the meeting.” (NY Times)
“U.S. consumer spending slowed in August, with a key retail sales gauge unexpectedly declining, as extended unemployment benefits were cut for millions of Americans, offering more evidence that the economic recovery from the COVID-19 recession was faltering. The report from the Commerce Department on Wednesday ramped up pressure on the White House and Congress to restart stalled negotiations for another fiscal package. At least 29.6 million people are on unemployment benefits. Consumer spending accounts for more than two-thirds of the U.S. economy and signs of fatigue are likely to grab the attention of Federal Reserve officials as they wrap up a two-day policy meeting.
“Consumers are being increasingly cautious with their spending,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York. “If Congress is unable to extend fiscal aid to households in the coming weeks, the economy will be particularly susceptible to a cutback in consumer spending, especially from the lowest-income families.
Retail sales excluding automobiles, gasoline, building materials and food services dipped 0.1% last month after a downwardly revised 0.9% increase in July. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have advanced 1.4% in July.” (Reuters)
“A steady if erratic decline in jobless claims over the summer appears to have slowed in September. Part of the reason may be an increase in layoffs at hotels, airlines and other service-oriented companies whose businesses have suffered a big loss of customers. More companies have announced permanent job reductions after demand failed to return near to pre-crisis levels.” (MarketWatch)
Week Ahead Highlights: There will be several mfg. and Housing reports due out next week.