Marc Jones and Sujata Rao of Reuters examined the big 5 investment houses expectations for 2021 and the themes are:

Will the US dollar fall in price? When the Federal Reserve cut interest rates to 0% for many good reasons, it kicked away the dollar’s yield advantage over its peers. As long as COVID is a major concern, the government will need to intervene in the economy and that means more debt.

Re-emerging Markets – developing countries would see a benefit from recovering global trade, tourism, commodity prices increasing, a weaker US dollar and predictability in the White House. Morgan Stanley, Goldman Sachs, JPMorgan Chase and Bank of America are overweight emerging markets.

Central Banking on it – everyone believes central banks around the world will keep interest rates low. Central banks worldwide spent $1.3 billion a hour since March on asset purchases. There were 190 rate cuts or one every 5 trading days, says Citibank.

JP Morgan estimates more than 80% of sovereign bonds from richer countries pay negative yields after factoring in inflation. Blackrock says to underweight the sector.

ESG: Here for Good the assets of investment funds adhering to Environmental, Social, and Governance (ESG) double this past year to $1.3 trillion. The pace is expected to increase.

2/3’s of ESG fund assets are in equities, but sustainable debt has grown 20% in 2020 to more than $620 billion.

Biden on tech – there may be a love hate relationship with tech under President Biden. In some areas Big Data, 5G, artificial intelligence, electric vehicles, robotics and cybersecurity President Biden’s policies may be just as combative as President Trump’s were.

Tech and e-commerce account for almost a 1/4 of US corporate profits and tech makes up 40% of MSCI’s emerging equity index.

Linking to dividend paying stocks, the trend in your life are shared with the rest of the world, what is important is what you do with it. We know that interest rates will be low because the recovery is a K shaped with many people benefiting and not benefiting from COVID recovery, the government has to ensure those benefiting continue to and those not benefiting are in position to do something when COVID is under control. Ideally in your portfolio are companies which try to stay within the law and continually make profits to pay dividends. If they are doing that you can sleep well at night.

There are more questions than answers, till the next time – to raising questions.

Reuters reports business news and often polls experts, in a recent poll Reuters asked 39 economists and analysts what the price of the benchmark Brent crude price would be? The answer is $50.67 a barrel.

Last month the poll was at $49.45 although Brent crude was trading in the range of $51 a barrel.

West Texas Intermediate were expected to average $47.45 a barrel, recently the price traded in the range of $48 a barrel.

Why are the experts predicting a non rising price? Oil is a commodity and supply and demand drives the price. Given the stay at home recommendations by the government and the rise of virus variant and the slow deployment of the vaccine, demand is expected to remain low.

Linking to dividend paying stocks, for generations oil companies have been great dividend payers and long term wealth generators. If your portfolio has a heavy weighing in the oil and gas section, it is time to look for alternatives if you have not done so already.

There are more questions than answers, till the next time – to raising questions.

Now that President Biden is in power, in theory it will be easier for people to be in a union. Under the pro business of President Trump, the government did not help and likely discouraged the activities. Whether you belong to a union or not, does not mean wages automatically go up. In political ads there are references to hard working people and often they are employed at higher wages in a union. However there are plenty of unions which are at the low wage scale, just above minimum. The issue is working conditions, if the pay is good.

In an article by Kate Conger of the New York Times News Service, more than 225 Google engineers and other workers have formed a union. The union met in secret for a year and is now coming forth. The issues will be pay, harassment and ethics. In many people’s mind the engineers that work for the tech companies work long hours, are well paid and have access to buying stock which if the company is successful allows for many to have million dollar homes. It is true some do, but in a very large company such as Alphabet or Google some do not.

In the world of tech there are contractors and they are paid less than full timers, so it often depends.

In the past, tech companies have resisted unions because they did not want them. As the industry continues to mature, maybe more companies will be unionized?

The new union at Google called the Alphabet Workers Union only represents a fraction of the 260,00 full time employees and contractors at Google. Part of their goal is to sustain pressure on management so that workers could force changes on workplace issues. The new union is called a minority union because they are allow to organize and then try to win a vote with the National Labor Relations Board, typically unions try to organize the majority and if they win the majority of votes they can bargain with management. The degree of success will depend on whether management wishes to work or work against the union.

Linking to dividend paying stocks, the focus on investing is the final result, did the company make a profit and can it pay a dividend. The longer you hold the shares, the more likely you are to examine the internal workings of the company. If you believe the company is relatively a good ethical company, there is little reason to examine the internal workings. One hopes and expects a good company wishes to keep its workforce and treats them in that manner, but it is an internal concern.

There are more questions than answers, till the next time – to raising questions.

The sexy part of investment banking is mergers and acquisitions because 2 companies join forces to have greater market share and expand their offerings. The reality is do the 2 companies join to become a stronger force? sometimes yes, sometimes no. Not surprising in 2020, when governments shut down the movement of people, mergers and acquisitions were down, for a while they almost stopped.

In an article by Joshua Franklin and Pamela Barbaglia of Reuters, Cary Kochman, Citigroup’s global co-head of M&A said the biggest story has to be enormous rebound we have experienced. After almost no activity, we went through a 3-5 year cycle in just 6 months.

The value of M&A globally dropped 5% to $3.6 trillion on data from Refintiv. There was 48,226 deals compare with 50,113 in 2019. A stock market rally and access to cheap financing gave chief executives confidence to pursue transformative transactions again.

Dealmakers see 2021 picking up steam in 2021 with companies, private equity firms and SPACs (special purpose acquisition companies) all doing acquisitions.

M&A volume in the US was down 23% to $1.4 trillion which is 40% of global deal-making, Europe was $989 billion or 35% and Asia-Pacific was $872 billion.

Private equity firms capitalized on the plentiful financing available and did leveraged buyouts of $570 billion.

More than 200 SPACs have raised $78 billion. SPACs typically buy a company 5 times the size of their IPO or according to a Goldman Sachs report that could mean $300 billion in activity in 2021 and 2022.

Linking to dividend paying stocks, when you buy the companies you buy them because they are profitable and can pay a dividend. In a rising stock market and access to very inexpensive money, most companies think growth or getting bigger. It is relatively inexpensive for them to buy something to enhance product lines or services. Just because it is relatively inexpensive as an investor you have to ask is it a good thing which the company is merging with. If the answer is no, cash out and look at alternatives. If the answer is yes, watch the time lines of expected savings and market share.

There are more questions than answers, till the next time – to raising questions.

If you think about electric cars, at the moment the name Tesla will likely come to the forefront. There are good reasons why you may think about Tesla – the stock has been on a great run, the cars, from the people who drive them are a joy to drive. Is Tesla a software company or a manufacturing company? How you answer the question determines your outlook on the company. However every company has competition. At the moment the competition is behind Tesla but in the automotive world, expect the competition to have very similar vehicles very quickly. Recently saw an article that 54% of the new cars being sold in Norway are electric and most are not Tesla.

In an article by Jack Ewing of the New York Times News Service, Mr. Ewing examined what the German manufacturers are doing. The German manufacturers include: Porsche, Audi, BMW, Daimler and VW.

Porsche started out with they have a reputation of high performance vehicles – the electric vehicle has to be a real Porsche, said Stefan Weckbach, the Porsche executive in charge of the Taycan. Reviewers of the Taycan noted the car can accelerate like a Porsche but it cannot go as far as the Tesla Model S and last Tesla’s self driving software.

Audi, Porsche and VW are all corporately related will be selling the e-tron GT, the emphasis is on driving comfort rather than setting speed records. In 2022, Audi plans to sell the Q4 electric SUV. Because of the electric motor, auto designers make the interiors of the electric car roomier than gasoline cars.

VW hopes to do what it does best, drive down the cost for each vehicle with massive production volumes and beat Tesla on price.

In 2021, Mercedes a division of Daimler with introduce the EQS, to complement its S class series. In 2022 it will introduce a SUV, because the most popular vehicle sold in the US is a SUV.

BMW will not be producing a fully electric vehicle until 2025, instead offering electrified versions of its conventional models.

Renault which is produced in France and is aligned with Nissan has been producing the Zoe which is the best selling battery powered car in Europe during 2020.

Tesla will be producing vehicles in Europe in 2021 at a plant in Gruenheide, east of Berlin.

Linking to dividend producing stocks, when you invest in a manufacturing company you constantly need to look to the future because of the lag time it takes to invest millions of dollars to produce what you hope the public will buy. If the company gets it right, then they have a good year. If not there is next year. In all fields there is competition, although some companies names come up every year as a dividend buyer you expect them to maintain their market share, if it falls seek alternatives.

There are more questions than answers, till the next time – to raising questions.

In an article by Saqib Iqbal Ahmed of Reuters, S&P Global research showed dividend payments to investors in the S&P 500 rose to a new record in 2020.

Dividend payments rose 0.7% to $58.28 a share from the previous record set in 2019.

Howard Silverblatt, senior index analyst for S&P and Dow Jones indices, noted a record dividend payment in the 1st quarter of 2020 and a stronger than expected payment in the 4th quarter led to record payouts to investors.

For 2021, Mr. Silverblatt currently sees dividend payments setting its 10th consecutive record year up 4.2%. Tesla is now included in the S&P 500 but does not pay a dividend, if you take Tesla out the index, payout would be 5.9%.

Interest rates remain low and boosting dividends helps bring more investors to buying stocks.

Linking to dividend paying stocks, companies look to alternatives to determine what level of dividends they will pay. In financing there are always choices – issue debt, equity or a combination of both. At the moment and for the next year or as long as COVID rages, interest rates will be low and investing in dividend paying stocks is a very good choice.

There are more questions than answers, till the next time – to raising questions.

The auto market is a bell weather for the economy and there will be many analysts projecting the future. Some people have a more vested interested because as head of a company they need to invest billions of money to tool and retool auto plants.

In an article by Tom Krisher of the Associated Press, the President of VW of America since 2018 Scott Keogh was interviewed.

The first question with VW is there was a scandal of emissions and 30% of people said they would never buy VW again, now the number is down to 13%.

13% sounds high, but you have to remember every brand has a 8 to 9% avoidance. The goal is not 0% but to be around 7%.

The market in the US will probably be down 14 -15% in 2020 to , with 14.5 million vehicles sold and VW having a 10% share. In 2021, the expectation is 15.4 million.

The trend for both shoppers and dealers to being digital is going to stay because it is more transparent and clear.

The electric market is 2% but every single survey 30 -40% of consumers says electric will be my next car.

Linking to dividend paying stocks, auto companies are in a very interesting area, they see the internal combustion engine is changing and electric vehicles are going to be a growth area but there is time lag between the 2 segments. Will we always have internal combustion engines? how many have to be produced for economies of scale? what is the price point which tips the market? All very important issues which someone has to make a decision on. We know the government under President Biden will encourage more electric, but when will consumers make the decision? On one hand you want your manufacturing company to be nimble and quick, but there are capital investments to be made, do you agree with your companies’ investment strategies?

There are more questions than answers, till the next time – to raising questions.

One of the most successful companies to come out of China is Alibaba Group run by Jack Ma. Since 1999 only 20 years ago, Mr. Ma has amassed a $59 billion fortune. If you think about Amazon, you can make comparisons to Alibaba. In the last few years, Mr. Ma moved into the financial services with a company called Ant Group.

In an article by Raymond Zhong of the New York Times News Service, Ant is a financial services and technology firm which has grown to help out its 730 million monthly users to take out small loans, invest their savings and buy insurance from their smartphones. With 730 million monthly users, Ant Group was going to do an IPO (initial public offering) and many firms would buy the shares.

Alibaba is headquarter in China and in China the Central Power has the final blessings. The Central Power wanted Ant Group to be regulated similar to a bank as opposed to a tech company. As a tech company the rules are much less than if they were regulated similar to a bank. At first, likely because of its size, Ant told the Central Power they should be regulated similar to a tech company. The regulators disagreed, but in China regulators are backed by the President of China. Regulators win.

The regulators have ordered Ant to “return to its payments origins,” and to strictly rectify illegal credit and wealth management financial activities. This means Ant to spin off those business lines, which have been increasingly important to its revenue.

Mr. Pan also the regulators had ordered Ant to reorganize itself to ensure that it met capital requirements. Keeping more money on its books to back its lending activities could crimp Ant’s bottom line.

Regulators have played give and take with Ant for years. When the company created a money market fund within Alipay that paid higher rates than bank deposits, the government forced the fund to shed risk and lower returns. After Ant began managing huge amounts of money in Alipay virtual wallets, the central bank made it park those funds made it park those funds in special accounts where they would earn minimal interest.

Ant said it would put together a plan for complying with the new requirement.

Linking to dividend paying stocks, all companies want to move into areas where they can make the most money, sometimes the government will step in and place restrictions on the company. The company’s best avenue is to work with the government because it has more levers to pull. Regulation or the threat of full regulation is why companies work with government. Companies love free enterprise but working with government is important to stay in business.

There are more questions than answers, till the next time – to raising questions.

After 20 months grounding Boeing 737 Max made its first flights in the US flying from Miami to New York. The flight which started the long process by Boeing was an American Airlines Flight 718 and the new year celebrations came early to Boeing.

In an article by Niraj Chokshi of the New York Times News Service, the Max is the workhorse of the global airline fleet, used for domestic flights and some shorter international flights. The benefits include being significantly more fuel efficient (the airlines save money on fuel), has a single aisle plane which passengers like because of the direct, non-stop flights.

Ryanair, the low-cost European airline has agreed to buy 75 planes and Alaska Airlines bought 24 planes.

As more and more people are vaccinated, American Airlines expect to operate 91 Max flights a day. In the meantime all American airline pilots will have gone through a retraining process. The capacity of the Max 737 is 172 passengers with 16 in business class.

United Airlines expects to begin flying Max on Feb 11 out of Dallas and Houston. Southwest Airlines which has an all Boeing fleet, expects to fly the Max in the second quarter. Delta does not use the plane.

Internationally, Gol, a Brazilian company became the first company to fly the Max and Aeromexico has begun using the plane. Equally importantly to Boeing as President elect Biden becomes President and the policy towards China changes, expect China to buy planes from Boeing.

Linking to dividend paying stocks, every company has a workhorse product or service which they have to accumulate revenue. It is something investors look at, expect to have recurring revenues and when it happens all is good. Every company has faced problems, but only deep pocketed ones such as Boeing which operates in a very controlled environment can bounce back. Normally, if the big revenue base is gone, it is time to find alternatives very quickly.

There are more questions than answers, till the next time – to raising questions.