A number of years ago, it was very possible for those in the executive suites to deny climate change and people can still do it, but public companies will not have choices. All public companies have to follow government regulations or be sued.

In an article by Huw Jones of Reuters, at the recent Group of 7 Finance Ministers, they back the creation of International Sustainability Standards Board (ISSB) to write baseline rules for disclosures on how climate change will affect companies’ performance.

The ISSB will be in operation before the November UN COP26 climate conference in Glasgow, Scotland.

The reason for the ISSB is investors have complained about a patchwork of requirements across the world. At the moment, the standards in the Euro community is higher than the US, are standards are needed.

The ISSB is being set up by the London based International Financial Reporting Standards Foundation which writes accounting rules used in 140 countries.

Linking to dividend paying stocks, all companies are trying to sell their goods and services into the market place and sometimes the marketplace rules change. You often hear the stability and consistency from the executive suites and the ISSB is one to do that. Some companies will lead on climate change measures because it saves them money, and they have determined their customers expect them to be leaders. Sometimes being a leader will save money on issuing bonds because the company is seen as green. With companies saving money and winning customers is the issue, even if your company has monopoly like conditions.

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

As a consumer when you look around you can see some prices rising and when prices are rising the natural reaction is expecting your wages to rise, when that happens inflation is built into the system. It is normal, but the federal reserve or Fed can help mitigate the rise. Should they? when is the time to allow the markets to do its normal thing? We know some people have been working consistently since COVID, but there are millions who did not, what does the Fed do?

In an article by Kate Duguid of Reuters, the Fed is giving mixed messages because they know that inflation is a concern, but it is not time to release the actions to control inflation. Fed Chair Jay Powell has said he believes some of the price increases will go down because the supply chain will be better and the pent up demand will normalize.

One of the benchmarks to look towards how investors feel about inflation is the 5 year forward break-even inflation rate which tracks the expected rate of inflation in 5 years time. It was recently at 2.2% below the 7 year high of 2.4%

The personal consumption expenditures price index (PCE) the Fed’s preferred measure for inflation rose 3.6% in April from a year earlier.

Last August, the Fed adopted a flexible average inflation target (FAIT) that is designed to be somewhat more forgiving to price pressures that in the past. The FAIT helps the Fed worry about both maximum employment and stable prices.

Linking to dividend paying stocks, when inflation rises bond yields have to go higher, at the moment bond yields are lower than dividend yields. If that changes money will flow to the higher yields, particularly in the yields are being paid by the US Treasury or government bonds. The Fed Chair has not allowed that to happen and in August the Fed Reserve has an meeting at Jackson Hole, Wyoming which will have all Fed watches waiting to hear what they say and do. Till then the total return on dividend paying stocks is a good method to keep your money invested in.

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

If you live near a port on the ocean, one of the biggest economic activities in the community has been the rise of people going to sea for an adventure. In most cruises, the ships sail through the evening and land at a port during the daytime. When the cruise ship arrives upwards of a 1,000 people go into the community to spend money and on shore some logistics on fuel, food and garbage are taken care of. For the host community cruise ships are a welcome sight.

In an article by Adriana Gomez Licon and Marta Lavandier of the Associated Press, the first cruise ship left Fort Lauderdale which is just north of Miami and has a wonderful port.

The big 3 companies in the cruise ship industry are Carnival, Norwegian and Royal Caribbean which all have branded names in ships. One of Royal Caribbean brands is Celebrity Cruises which unveiled Celebrity Edge which costs $1 billion in December 2018 and it was the first ship to set sail in 15 months.

The Port at Fort Lauderdale is called Port Everglades and the Governor noted the port lost more than $30 million in revenue in fiscal year 2020.

During the 15 months shutdown the big 3 companies had to raise $40 billion in financing just to stay afloat. Collectively they lost $20 billion last year and another $4.5 billion in the first quarter in 2021 according to SEC filings.

The good news for the cruise industry is according to an interview by President Arnold W Donald, President and CEO of Carnival Cruises, the world’s largest leisure travel company, they have 8 million people who are repeat cruisers. There should be and is a large pent up demand to cruise when people feel safe to do so.

Linking to dividend paying stocks, in a downturn profitable companies which can pay a dividend have the ability to bounce back at higher levels because of the many assets they have and can draw upon. As you do your research, you can determine how well the assets are being used.

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

If you can think about times before COVID, you might consider infrastructure bills pork bills. What that typically meant was a bill for infrastructure would be proposed and to pass it every Senator would add whatever his/her district needed. Some of the infrastructure was needed, some of it would be a bridge to nowhere, expansion of highways for easier access to cottages, you name it it was there. Was all of it necessary? no but it provided ribbon cutting opportunities and construction jobs in the district.

Post COVID, all the concerns are still abound but politics plays a greater role. In an article by Zeke Miller of the Associated Press, the $1 trillion bill backed by politicians of both parties seems to have legs to be passed. If passed, much of the spending would typically go to the biggest players in the field of construction, consulting, engineering firms, etc.

The politicians who back the bill, all say it is badly needed as infrastructure was talked about during the last administration, but little was done. Given the employment rates, construction jobs are a good thing for the public to see.

In the Senate, to pass the legislation 60 votes are needed, the Democrats can receive 50, plus the Vice President if needed or need at least 10 Republican votes. The Minority Leader Mitch McConnell has gone on various news shows to say he wants nothing done, because it would hurt Republican chances in 2022 elections. The Republican Senators lead by Mitt Romney believe infrastructure needs to be done and hopefully they pass the bill.

Linking to dividend paying stocks, invariably with a government bill of a trillion dollars some public companies will benefit for the money. The downside of government contracts is the time element which leads to advantages for larger established companies. With the signing of contracts, profitable companies will continue to have diversified income stream for a number of years to come.

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

If you were to think about investing in the stock market, most investors were buy and hold investors. There were reasons for that, commissions were expensive, to open a trading account you needed thousands of dollars, the brokerage industry was not really interested in small accounts because they did not generate fees or commissions because by definition they are small accounts. It was hard to open an account for you would have been told you can buy a mutual fund account or a bank product. For a number of reasons many small investors did not trade on the stock exchange.

In the the last few years, that has changed and there are multiple firms where small investors can open accounts and begin trading at no commission. The process is the democratization of Wall Street. With all changes there are some good and not so good things about it. For the moment, the new entrants have been rising the wave of increases in Wall Street, but the rule of Wall Street is stocks go up and they go down.

In January the rise of meme stocks and Wall Street Bets on Reddit form. If you never been there, you should look at it. The meme stocks are considered GameStop, AMC, Blackberry and a few others. From a fundamental analysis the stocks trade at higher multiples than they should, however the price rose and the meme stock traders occasionally push up prices. This increases volatiltiy.

In an article by Erin Griffith of the New York Times News Service, Gavin Baker an investor at Atreides Management noted volatility is moving from market to market and I am treating it as the new normal.

In general, governments have tried to ensure people have money to spend during the shutdowns of the pandemic and bank deposits grew to $18.5 trillion in the first three months of the year compared to $15.8 trillion in the same period of 2020. During the shutdown, people could not spend money on leisure and entertainment and some bought stocks. When they can spend on leisure and entertainment will they buy stocks?

There are some who are suggesting the markets will fall such as Michael Bury and it could.

Linking to dividend paying stocks, when you buy a dividend paying stock the company is making a profit and paying you a dividend. The market will value the profit making and raise and lower the price of the stock, the dividend can still flow when the price of the stock goes up and down. In the long run, owning profitable stocks is good and when they pay a dividend they provide insurance of what the market does.

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

In June many companies held their Annual General Meetings to elect Board of Directors, appoint auditors, determine executive compensation and report on how the year ended. That is good, however on Wall Street that was yesterday and today there are new concerns. How is the quarter going? what is the impact of inflation? are margins okay?

In an article by Caroline Valetkevitch of Reuters, for the second quarter earnings, analysts are expecting a 64% jump over a year ago, the biggest increase for any quarter since 2009 according to IBES data from Refinitiv.

According to Jonathan Golub, chief US equity strategist and head of quantitative research at Credit Suisse, right now companies are able to pass on all the higher input costs to their consumers, so profit margins are under no pressure at all.

The S&P 500 is up 11% in 2021, yet the index is trading at 22 times forward earnings, slightly below the 23.5 times at the start of the year, according to Refinitiv.

Next year’s outlook is less clear. The S&P is currently projected to increase by 36.5% in 2021 and in 2022 a more normal 11.7%.

Linking to dividend paying stocks, the stock market values have increased and all investors like that. While we will all take 20% plus gains, the normal is not 20%, financial planners budget for 4% gains. As a dividend investor while you enjoy the gains in the value of the stock, your bias is the dividend which continues to pay you. The growth in the value of the stock is the extra and for the past year or two the extras have nicely increased the value of your wealth.

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

If you own an index fund for a long period of time, the trend line tends to be upwards because all index funds rebalance themselves or drop laggards or “losers” and bring in winners. Most individual stock pickers who own more than 10 stocks owns at least one stock which has lost money or is not rising in value, but there is hope. The stock was chosen for a reason and hopefully that reason still exists and maybe the market will find it.

In an article by Chuck Mikolajczak of the Associated Press, on the last Friday of every June the firm which runs the Russell Indexes called FTSE Russell refreshes its indexes. On the stock markets, passive investing or index investing has taken a larger share every year because over the long term it works, however if you need to take money out over the short term, remember markets fluctuate. If you can leave your money in the index will be higher.

At the end of 2020, about $10.6 trillion in investor assets were benchmarked to Russell US indexes – The Russell 2,000 of small cap companies; Russell 1,000 of large cap names; Russell 1000 growth, Russell 2000 value.

Market capitalization for the Russell 3000 index increased from $31.4 trillion in 2020 to $47.7 trillion as of May 2021.

This year the trends include SPAC and meme stocks, the stocks that met the threshold will be included in the new indexes. Goldman Sachs expects 255 additions and 297 deletions at the Russell 3000.

The affect of the rebalancing is volume on the exchange will surge as stocks are bought and sold and rebalanced in the indexes, resulting in the biggest trading volume day on the exchange. Most of the activity happens in the last 15 minutes of trading and the estimated net trade will total $75 billion.

Linking to dividend paying stocks, an index fund over a long period of time will perform very well because the fund will drop losers and pick up winners. The other way to have similar results is buy profitable companies which pay a dividend. While the multiple of the market will go up and down, the dividends ensure your total return remains high and that is a good thing while investing.

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

When you think about the internet, you may think about Google and that is good but it reality google is a search company and advertising company and many people use its services. However the internet is much more than google.

In an article in the Associated Press, in mid June a software bug at a major network provider briefly knocked dozens of financial institutions, airlines and other companies across the globe offline during peak business hours in Asia. In the afternoon when people are trying to do business, the internet was down in Asia and Australia. The company said there was a software bug on a service that protects customers against denial-of-service attacks. For the customers all traffic was rerouted in minutes, but it took 4 hours to restore the system.

The company is called Akamai Technologies and is based in Boston, Massachusetts and Akamai Technologies, Inc. is a global content delivery network^[2] (CDN), cybersecurity, and cloud service company, providing web and Internet security services.^[3][4] Akamai’s Intelligent Edge Platform^[5] is one of the world’s largest distributed computing platforms. The company operates a network of servers around the world and rents out capacity on these servers to customers who want their websites to work faster by distributing content from locations near the user. When a user navigates to the URL of an Akamai customer, their browser is directed by Akamai’s domain name system^[6] to a proximal edge server that can serve the requested content. Akamai’s mapping system^[7] assigns each user to a proximal edge server using sophisticated algorithms^[8] such as stable matching and consistent hashing, enabling more reliable and faster web downloads. Further, Akamai implements DDoS mitigation and other security services^[9] in its edge server platform. (source Wikipedia).

Akamai’s customers includes more than 300 of the world’s largest banks, more than 30 airlines, more than 200 national government agencies and 825 retailers.

The article notes recent outages underscore how vital a small number of behind the scenes companies have become to running the internet.

Linking to dividend paying stocks, Akamai Technologies does not pay a dividend but one day it will likely because it has a solid base of customers who will renew their contracts every year. The reason why you may consider the company is think about plumbing in a house. No one buys a house for the plumbing, but someone supplies it to make the house work, whoever is the supplier maybe the company to invest in because all houses need plumbing. Sometimes the best investments are not the household names but who supplies the households. Research needs to be done before investing.

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

Investors around the world are looking to central banks in the quest to see if inflation needs to tackled after the emphasis has been on jobs and creating the best conditions to have more jobs. If one consumer buys items, then it is good but if many consumers are opening their wallets to spend money, then central banks worry about inflation.

In an article by Terje Solsvik and Victoria Klesty of Reuters, the Central Bank of Norwary gave notice it expects to raise interest rates 4 times by mid 2022 (next year) as the economy shakes off the effects of COVID-19. The Norway Central Bank is called the Norges Bank and Governor Oeystein Olsen said expects to raise rates by a quarter every 3 months.

The Swiss National Bank signalled monetary policy would stay ultraloose for the foreseeable future.

In Norway, growth is expected to be 4.1% up from 3.4% and inflation was slowing from 3% to 1.7% below the goal of 2%.

The finance ministry would raise capital requirement held by the banks termed supplementary buffer capital 1.5% of the balance sheet up from 1%.

Linking to dividend paying stocks, all central banks in the developed countries have been using the tools in their toolbelts to maintain their economies. As people are vaccinated and people can gather allowing more industries to open up, the central bank is trying to lessen their role in the economy. It is a hard balancing act but investors always look to seeing when measures are too harsh or restrictive. If too harsh and inflation runs up, then alternatives to investing open up. If too restrictive the tools may not work for many of its citizens.

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