The market was getting a bit of a reprieve today from the recent selling, but investors moved back to the sidelines by the close. The best part of today’s headlines for consumers could be the much-larger-than expected build-up in oil reserves. Oil prices dipped on the news, which could pave the way for lower gasoline prices ahead for consumers.
Starting with the earnings positives, nice numbers and guidance out of Tupperware (TUP) and Lockheed Martin (LMT) had both of those companies seeing higher prices throughout the session. On a non-dividend related note, Facebook (FB) was able to give investors something to cheer about finally as the company reported a good quarter. How much the stock can sustain this morning’s bounce will come under scrutiny, as plenty of additional Facebook shares will be coming to markets in coming months from company insiders/investors as IPO lock-up expirations occur.
We had plenty of stocks disappointing investors this morning, with names like Norfolk Southern (NSC), Corning (GLW), Lorillard (LO), Altera Corp (ALTR), and Brinker International (EAT) all seeing red following their earnings announcements.The Times, They are a Changin’…
I continue to see the modern global economic landscape as one that is undergoing massive changes. Not only are consumers behaving differently, but corporations are also responding in new ways to constant pressures from the investment community. Public companies are under extreme pressure deliver bottom-line results each quarter, despite a global economic pullback. The only solution to growing profits amid weaker revenue is to cut costs — and that means eliminating jobs (especially higher-paying ones). These factors, among others, will combine to drastically alter investors’ gameplans in the coming years.
A recent note from automotive research firm Polk indicates Americans can now expect to buy fewer new cars during their lifetime (approximately 4 less than they would have when they reach their peak buying age of 76 years old). Why is this trend happening? Primarily because people are holding on to their vehicles much longer than they would have years ago. Cars are much more dependable nowadays, but they’re also more expensive. Combine strong depreciation factors (a new car’s price drops by thousands of dollars the moment you drive it off the lot), and consumers have figured out that the fiscally smart thing to do is to keep their existing cars.
Also, consider some recent survey findings by the Pew Research Center, which found 38 percent of U.S. adults are “not too” or “not at all” confident that they will have a sufficiently-sized financial nest egg upon their retirement. Forty-nine percent of those ages 35-44 said they had “little or no” confidence that they will have enough money for retirement, more than double the 20 percent share in that age group who said so in 2009. These are not fluke statistics and we certainly feel this trend adds to the idea consumers will continue to deleverage their balance sheets. There is a price to pay as individuals wise up to how they should be handling money (saving, staying out of debt, investing). Corporations will continue the process of streamlining cuts, as we have been reading from the latest round of quarterly reports.
Sooner or later these cuts trickle down to corporate balance sheets in the form of lower revenues/profits (less high quality jobs means less money for people to spend), and depending on valuations, lower share prices. Wall Street tends to first cheer companies streamlining costs through headcount reductions, but eventually the end game is growing revenue. Those who can’t right the ship or at least stop the hemorrhaging will not be attractive for investors to pour their money into.
Hence, our mission at Dividend.com to avoid these potential dangers ahead of us. We’ll be sure to continually point out these issues to subscribers and keep our investment ideas as current as possible.An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our Best Dividend Stocks List are the names we currently like for new investor capital, regardless of what date the stock was first recommended on. If and when a stock is removed from the list, we will clearly state whether the stock should be sold (which is rare but occasionally will happen), or simply held in one’s account until we see a better entry point or catalyst.
And here’s one last thing to remember about what we do here at Dividend.com: it’s not just the names that we recommend that can help you build wealth, but also the things we try to steer you away from that are just as important. Forget about speculative or penny stocks, chasing unprofitable IPOs, and listening to the manic talking heads in the business media!A Dividend Capture Strategy for Active Investors
We now offer complete U.S. dividend data for all Dividend.com Premium members, so anyone that focuses on “Dividend Capture” trading strategies should have plenty of good stuff to research each day. Just check our enhanced Ex-Dividend Calendar, which is the best in the business, to search for upcoming payouts.
Speaking of dividend capture, Dividend.com Premium members can also access a 9-page report we published on the essential elements to any successful dividend capture strategy. Be sure to check it out here on the Premium homepage.
Thanks for reading everybody. I’ll see you tomorrow!