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AbbVie raises dividend again–but only by 5%
Once a company has put in the time and money to make the Dividend Aristocrats list, the company isn’t likely to squander that investment just because a recession looms. To make the list–and garner a big chunk of cash from conservative dividend investors–a company has had to pay a dividend for a least 25 consecutive years and has had to raise that dividend every year. A company like 3M (MMM), which owns a 64-year record of paying and raising its dividend payout, is as close to a dividend sure thing as exists. Which is why it’s not surprising that AbbVie (ABBV), which owns a 50-year record of paying and raising its dividend, announced that it would raise its dividend in 2023 to $1.48 a quarter with the February 2023 payout. That would bring the annual dividend yield to 3.5% But…
I’m selling Dow tomorrow out of my Dividend Portfolio
The November rally was kind to Dow (DOW) with the stock up 10.4% from November 1 through December 1. The shares have given back some of that lately, but I’d still like to book any gains here ahead of a possible recession or at least a further economic slowdown in 2023.
Please Watch My YouTube Video: Waiting for the Fed
Today I posted my two-hundred-and-fourteenth YouTube video: Waiting for the Fed. We are about a week out from the Fed’s December 14 meeting, where another 50 basis point increase is expected. We’re now in the Fed’s quiet period, but last week Fed presidents were adamantly setting expectations for 50 basis points. A 50 basis point increase would be a step down from the previous 75 basis points, and many would see that as a sign that the Fed is tapering. However, the main thing to look at on December 14 is the Dot Plot of projections from the Fed itself. That will tell investors and traders how much longer the Fed now expects these raises to continue, and how where the peak might be in rates for this cycle. Wall Street is currently predicting a peak 5% benchmark rate. (We’re currently at 3.75-4%.) But I think the top is likely closer to 6%. If the Fed settles into a projection of 5%, the market will likely relax and head into an end-of-year rally that might end in the beginning to mid-January. If the Fed gives any impression that it’s looking looks at something closer to 5.5 to 6%, that would be enough to scare the market and lead Wall Street to lower projections of market gains for 2023. Right now the S&P 500 continues to teeter on the edge of resistance near the 4,000 ceiling set by previous highs of 4110 in September and 4080 at the end of November. If the Fed doesn’t come out with jarring news on the 14th, I think we can look for the index to break through 4000 until it heads back down in January 2023.
Stocks are fighting 3 forces today–one will go away next week
Stocks are struggling again today with the Standard & Poor’s 500 near the breakeven mark for most of the session. As of 1:15 p.m. New York time today, the S&P 500 was up 0.09%. It closed down 0.19%. What’s weighing on stocks?
Please Watch My YouTube Video: Trend of the Week Yield Curve Inverts–What Does It Mean?
Today I posted my two-hundred-and-thirteenth YouTube video: Trend of the Week Yield Curve Inverts This week's Trend of the Week: Yield Curve Inverts--What Does it Mean? The Yield Curve has now inverted, meaning short-term treasuries are now yielding more than...
Oil markets are a supply/demand battleground today
As of 12:45 p.m. on Monday, December 5, U.S. benchmark crude West Texas Intermediate was down 1.63% to $76.68 a barrel. International benchmark Brent crude was down 1.39% to $84.38 a barrel. Brent is now up 11% this year but down from $120 a barrel in June. The market is a battleground today between cuts to supply and worries about a slump in global demand.
Saturday Night Quarterback says, For the week ahead expect…
On Friday, the European Union agreed to impose a $ 60-a-barrel cap on all purchases of Russian oil. Pay more than that and sanctions kick in that include a ban on shipping and insurance on any oil shipments when the oil has been purchased above the $60 a barrel price. That would have produced enough chaos on its own since the announcement of the cap came before oil, insurance, and shipping companies saw the full details of the sanctions. That effect is that nobody will be quite sure what purchases will trigger what sanctions when trading begins on Monday morning. One possibility is that conservative company lawyers will decide not to do a deal when they can’t figure out the consequences. At the least, that problem will slow the market on Monday. And then today, Russia announced that it will not accept the $60 per barrel price cap for its crude oil Nobody has any idea what that means (but I’ll give you my read below) Suffice it to say, that oil market chaos is a possibility
Freyr Battery announces sale of 20 million shares to raise capital for its Georgia gigafactory (and other manufacturing expansion)
Yesterday, shares of clean energy battery startup Freyr Battery (FREY) rumbled 12.01% on news that the company would sell 20 million new shares to raise capital for its planned battery factories in Norway and (newly announced) Georgia. Today, December 2, traders and investors have done a bit of rethinking and bid the stock up 3.91% as of the close.
Hot enough to make the Fed say ,”75, please”? November jobs report comes in above forecasts
Nonfarm payrolls increased by 263,000 in November, the Labor Department said today. (And the October jobs total was revised upward to a gain of 284,000.) The unemployment rate held steady at 3.7%. Average hourly wages rose 0.6% in November from October. That was the biggest increase since January. Wages are now up 5.1% year-over-year. Economists surveyed by Bloomberg were looking for the economy to add 200,000 jobs in November and an unemployment rate of 3.7%. All of this shows a labor market that remains in top gear when the Federal Reserve has been looking for weakness in the jobs data as a sign that higher interest rates are slowing the economy enough to reach the Fed’s inflation rate goal.
Please Watch My New YouTube Video: Quick Pick Defiance Quantum ETF
This week’s Quick Pick is Defiance Quantum ETF (NYSEArca: QTUM). I recommend this great piece in Barron’s this week from Eric J. Savitz on the future of Quantum Computing. As Savitz points out, Quantum Computing is likely to be a next big thing in computing. Venture capitalists have recognized this, with 251 quantum-computing start-ups raising $4.5 billion in VC funding since 2017. At this point, there are a lot of different approaches to this technology and it’s too early to tell which of these companies will win out, which is why I’m recommending this ETF. QTUM is down about 26% to 2022 to date, much less than any of the individual quantum startups. With an expense ratio of 0.4%, it’s a relatively cheap ETF. I would expect to see this price dip again in early 2023, though with a very long-term play like this, it’s less important to get in at the very bottom. I’ll be adding this to my Millennial Portfolio, where I have stocks with a really long time horizon, which is available on my paid site, JubakAM.com.
It’s deja vu all over again: Stocks struggle at technical trend lines
At 2:20 p.m. New York time today, December 1, the Standard & Poor’s 500 traded at 4074. That’s just slightly above the 200-day moving average for the index of 4048. Yesterday, the S&P 500 closed at 4080. The 200-day-moving average was at 4050. Yep, once again, we’re seeing a struggle to break through technical resistance near the 4,000 level.
Fed’s preferred PCE inflation measure fell in October–but not by much
Inflation progress in October but painfully slow. PCE–personal consumption expenditure–in inflation, the Federal Reserve’s preferred inflation index, rose at a 6% rate year over year rate through October. That was down from a 6.3% rate in September. The core PCE index, which strips out food and energy costs, rose at a 5% rate, roughly where it’s been for most of 2022.
Powell was very clear, but he didn’t add clarity on Fed intentions
In a speech today Federal Reserve Chair Jerome Powell clearly confirmed what other Fed officials have said this week: 1. The Fed will raise interest rates at its December 14 meeting by 50 basis points and not 75. That would follow on four straight 75 basis point interest rate increases. 2. The Fed will moderate the pace of its interest rate increases going forward. 3. The peak for the Fed’s benchmark interest rate will be “somewhat higher” than estimated in September. The Fed’s estimate in September was for a peak of 4.6% in 2023. The current benchmark rate is 3.75% to 4.00%. The Fed Funds futures market sees rates peaking at about 5% in the second quarter of 2023. What he didn’t clarify is what that peak rate might be or when the financial markets might see it.
Please Watch My New YouTube Video: The Fed Is Now On Message–Ask Why
Today I posted my two-hundred-and-eleventh YouTube video: The Fed Is Now On Message–Ask Why Today’s topic: The Fed is Now On Message, Ask Why. Last week I spoke about how confusing the Fed’s messaging had been recently, but this week, everybody has been on the same page. St. Louis Fed President, James Bullard, a fairly aggressive inflation fighter, suggested we need to take the Fed rate up to 5-7%, a hike from the current 3.75-4%. Loretta Mester, President of the Fed in Cleveland, agreed that the Fed isn’t near a pivot and John Williams, President of the New York Fed, came out with a detailed statement saying that more work is needed on inflation and unemployment may need to rise to 4.5-5% by the end of 2023. While Williams didn’t use the word, “recession,” it’s clear that you don’t reach those unemployment numbers without hitting a recession. So, why are these formerly out-of-sync Fed presidents suddenly aligned on message? The Fed is data-driven, and Fed members got new inflation and jobs numbers recently before the public release Thursday and Friday. Could be that these new data points have driven the Fed to the conclusion that we shouldn’t expect a pivot any time soon. Or maybe it’s just that the Fed goes into its quiet period soon before the December 14 meeting.
Pick #8 for My Special Report Own the Future for Pennies with my 10 Best Penny Stock Picks: ESS Tech
Call this bookkeeping. I recommended ESS Tech (GWH) in my November 11 Quick Pick video on Youtube. Today I’m adding it to my Special Report: Own the Future for Pennies with my 10 Best Penny Stock Picks as pick #8. And to my Millennial Portfolio–For Investors With More Time Than Money. The stock is down $6.44% today November 30 to $3.0386, so this seems a good time to buy for patient, very long-term investors. Here’s what I said in that YouTube video.
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