For any commodity market, there are forces of supply and demand and you can look at the stock market in the same fashion. For the past decade, there has been a decline in the volume of new shares available to buy, this meant buying was done on the existing shares and that helped power the market’s longest bull run. During the pandemic, companies stopped buying back shares and list equity instead to shore up balance sheets.

In an article by Sujata Rao of Reuters, total share offerings have surged to $700 billion raised worldwide in January-September according to Refinitiv. Although share buybacks dropped, M&A volumes and debt-funded buyouts have increased which typically removes shares from the exchange.

Global net supply share issuance adjusted for delistings and buybacks – totalled $320 billion in the first 10 months of 2020 or an expected $380 billion for the year noted JPMorgan Chase analyst Nikolaos Panigirtzoglou. Last year the net supply was $450 billion,

For years, the biggest buyers of US shares were companies themselves – a trend that spread to Asia and Europe – but global 2020 buyback volumes have fallen to $250 billion or less than an third of 2019.

Linking to dividend paying stocks, when you purchase a stock there are many factors going into the price increasing and one of the factors is the number of shares outstanding. In corporate finance there are times when companies sell shares and there are times companies buyback the shares, it is a normal thing to do. The same is true with debt, traditionally rates do not stay low for years at a time they move up and down. Decreasing the number of shares increases the earnings per share which increases the multiple the shares can trade at. As long as the company is profitable and doing a good job, your total return increases and that is a good thing as you patiently hold the shares.

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

.

In a report issued by investment firm Janus Henderson, dividend payouts by the world’s biggest firms in 2020 will fall by 17.5 to 20% or about $263 billion. However in 2021 they could rise 12.2%.

In an article by Marc Jones of Reuters, Janus Henderson noted dividends are a major source of income for public and private pension funds, but companies trying to cope with COVID cut dividends by 11.4% or $55 billion in the 3rd quarter after a $108 billion in April and June. Janus Henderson says in the best case, they see a fall of $1.20 trillion on an underlying basis.

Some companies which cut their dividends earlier this year, have now increased them on the expectations of 2021 being a relatively normal year. The biggest cuts not surprisingly has come from the travel, leisure and retail firms. However, pharmaceuticals, food producers and food retailers all produced higher dividend payouts.

Britain’s banks and oil firms meant payouts were down 42%

Australia’s government ensured banks saw a 40% drop.

US dividends were down 3.9% with the greatest impact on share buybacks.

Japanese payouts were down 16%; Chine had a 3.3% rise and Hong Kong firms were up 10%.

The world’s biggest dividend paying firm is now a tech company. as of December 1, it raised its Q4 dividend 10% and is now the biggest dividend payer.

Linking to dividend paying stocks, the economy continues to evolve if you were to go back 10 years you would see the big oil companies were the biggest dividend payers but now the big tech companies are throwing off so much cash, your portfolio has hopefully changed. Fortunately none of the changes had to be done overnight but over the decade. With dividend paying stocks, you have the ability to use patience as your guide.

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

It is now official that Janet Yellen will be become the new Treasury Secretary under President elect Joe Biden’s administration. With every appointment, a search for how the person handle past crisis and past comments which could affect policy. Generally, most public figures do not say a great deal unless they really want to, the speeches have been vetted for reaction plus and minus and then the speech is made.

In an article by Rita Trichur, Janet Yellen as the Chair of the US Federal Reserve in October 2014, delivered a speech on income inequality that raised eyebrows in central banking circles. Ms. Yellen challenged policy makers to consider how the trend between the rich and the poor was affecting the financial well being of most American families.

Ms. Yellen left the US Federal Reserve when President Trump did not reappoint her, but President elect Biden wants to address the issue of income inequality.

In the past 40 years, the richest households have increased their share of the country’s total income. In 2019 the top 10% earned 45.4% of pre-tax national income, while the bottom 50% shared 13.5%.

In the past 40 years while the wealthier have been getting wealthier, the lower-income earners generally spent most of what they earned from their paycheck. 25% of Americans have no wealth.

While one solution is to start over again, because the tax system is very complex and generally benefits those that have wealth. Joe Biden has proposed an increased tax on those that make over $400,000; and possibly increasing the inheritance taxes. (in a country that stresses the best and brightest go the top, it does not make sense that if you inherit money you are 3/4’s of the way before the lowest income starts). Biden has also stated the minimum wage should rise to $15 a hour, but unless it is written into grants from the federal government, it may be wishful thinking on behalf of the President.

Linking to dividend paying stocks, there will be greater taxes but the world will continue because the economy of the US is dependent on people shopping and more people will have resources to spend money. If some of the ideas proposed by President Biden and more people move from spending every pay check to actually have savings that is a good thing, it is the reason why one wishes to invest in dividend paying stocks.

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

Soon President elect Biden will be the new President and one of the 4 items on his agenda is the Green New Deal. The Green New Deal is about emitting less carbon and for many organizations it is about reducing energy costs – the alternatives are less expensive. Even though President Trump did not encourage solar and wind energy, they have developed as costs in the manufacturing decreased which means many utilities will benefit from the Green New Deal. In the era of President Trump, the President may have loved coal, but many utilities have changed to natural gas to save costs. Most utilities have a divisions which does solar and wind energy, but there are some purer plays.

In an recent article Scott Clayton of TSI Network examined the field to find strong dividends from renewable energy stocks poised to move higher. His criteria was:

US power generators and Canadian provers with significant US operations

TSI uses a point system to help eliminate companies there system is:

1 point for 5 years of continuous dividend payments – 2 points for more than 5 years

2 points if the company has raised the payment in the last 5 years

1 point for management’s commitment to dividends (President’s letter is often the source)

1 point for operating in non-cyclical industries

1 point for limited exposure to foreign currency rates and freedom from political interference

2 points for a long term record of positive earnings and cash flow sufficient to cover dividend payments

1 point for being an industry leader

Company Div Sustainability Points Div Mkt Cap 1 Yr Ttl Recent

Rating Yld % ($ bil) Rtn % Price $

Algonquin Power Above Average 9 3.9 12.6 19.1 21.39

NextEra Energy Above Average 9 1.8 148.9 39.3 77.54

Brookfield Renewable Partn Above Average 8 3.1 23.4 34.5 77.36

Xcel Energy Above Average 8 2.3 38.7 24.3 74.69

Clearway Energy Above Average 7 4.3 6.1 55.9 30.64

Innergex Renewable Energy Above Average 7 3.0 4.2 45.9 24.18

Linking to dividend paying stocks, sometimes if you your investments and government policy should dovetail into each other perfectly. If you own the above types of stocks and the Biden Green Deal is announced, then the emphasis for more to be done and easier permits should be the result. As long as manufacturing costs continue to fall, these types of stocks can be held on for years.

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

President Trump for 4 years talked about turning inward and making America first. This was a change of policy since WW II when the US lead in rebuilding Europe with the Marshall Plan and during the cold war the US was considered the policeman of the world. It had the greatest military and it exercised its power all over the world. President Trump, until President elect Biden takes over and rejoins the Europe alliance, will be carrying on the inward stance.

The inward stance is not new, in the 1400’s China was on the verge of the greatest nation in the world but turned inward for 500 years. England was once the dominate country of the world at its height 2/3 of the world’s population was under the British crown. In 1947, India was given its independence and Britain has not been the same since.

The issue is always if the US turns inwards, what country is taking its place by turning outwards? Is that in the best interests of the US?

In an article by Nathan Vanderklippe of the Globe and Mail, President Xi Jinping told a gathering of diplomats in Beijing’s Great Hall of the People to adjust their thinking. He said, “Look around the world. We know we are facing unprecedented change not seen in a century.” The phrase means China is peering out on an opportunity to advance its own interests.

Linking to dividend paying stocks, when you own a consistently profitable company which can pay dividends it tends to be a leader, whether the market is monopoly or monopoly like, the President of the of company is a leader. What he or she does and does not do is a signal to the competition. If a company is not going to lead, it will be following the competition. As you examine your investments, ask yourself how does this company remain in a leadership position. If it has been a leader and you do not see it continuing, it is time to find alternatives.

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

Where we live in the world, that area is what we think about first. If you focus on the New York markets you spend time thinking about what is the federal reserve going to do or not do? However, if you around the world to Europe, you might ask what is the European Central Bank or ECB doing or not doing? Europe has a range of economies – some doing okay, some flat line and some not doing well at all and somehow the ECB must manage the entire lot.

In an article from Reuters, the ECB will focus on more emergency bond purchases and cheap loans for banks whit it puts together its new stimulus package for December to help out the pandemic-hit euro zone ECB president Christine Lagarde said.

The ECB’s job was to keep borrowing costs sufficiently low for households, firms and government and support the banking sector to prevent a credit crunch. The 2 biggest tools have been the Pandemic Emergency Purchase Programme (PEPP) and Targeted Longer-Term Refinancing Operations (TLTRPs).

Ms. Lagarde said while optimistic about the vaccine, it will be some time before there is widespread immunity is achieved.

Linking to dividend paying stocks, if more stimulus is needed in Europe, do you believe it is needed in the US? What is different because the Central Banks have been using the same type of playbook. Most of us are focused on the areas where we live because that is what we come into contact with, but ensure you look around the boundaries to gain a better perspective and decision making.

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

If you read or listen to the press around the world, COVID is increasing in Europe and North America which means people are more likely to stay at home or not drive vehicles. Ever since 1973, the world has paid attention to OPEC as they raised prices in that year. OPEC believes global oil demand will rebound more slowly in 2021 than previously thought because of rising coronavirus cases.

In an article by Alex Lawler of Reuters, demand will rise by 6.25 million barrels a day (b/d) next year to 96.26 million b/d, the growth is 300,000 b/d less than expected a month ago.

OPEC is expecting demand to be down until mid 2021, by then hopefully people around the world will be getting the vaccine. OPEC would love to raise production but for now, it is lowering them.

Linking to dividend paying stocks, President Trump often said he was a cheerleader for the economy, but those in the commodity business live and die based on supply and demand. When demand is high, prices move upwards, when demand is low, prices move downwards. Fact check your favorite politician with forecasts from commodity producers, you will receive a fuller picture, in order to make a decision.

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

If you think about Amazon, Alibaba is similar in China, it is the largest internet seller of goods and to increase sales they created singles day. In a similar fashion Amazon created Prime Day to boost sales and have “better sales for consumers” and to take advantage of it, consumers need to be on their platform. In 2020, according to Josh Horwitz of Reuters, Alibaba sales for its post-COVID-19 Singles’ Day was $74 billion.

The Singles’ Day event is the world’s biggest sales event or even bigger than the upcoming Black Friday and Cyber Monday events around Thanksgiving.

This year Alibaba increased the number of days Singles’ Day ran and the $74 billion was spent on 16 million discounted items. More than 340 companies including Apple, L’Oreal SA and Huawei Technologies Co Ltd exceed 100 million yuan in sales with 13 brands recording Gross Merchandise Volume above 1 billion yuan.

In a poll before Singles’ Day, Sina Entetainment found that 4% of the 191,000 people who responded expected to spend more than 10,000 yuan compared to 43% who aimed to spend less than 1,000 yuan.

Linking to dividend paying stocks, retailers are always trying to make consumers spend more money and making up reasons or allowing someone to rationalize their decisions easily is a good thing to do. In the US someone made up Valentine’s Day and it has morphed into expectations of receiving something. It is what retailers do and as public we buy into it. For your investments which appeal to the consumer, what do the consumers buy into?

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

We all hope the COVID vaccine happens sooner than later, however realistically the distribution of the vaccine for all people will take months. However in Washington what will politicians do? before the election some Republicans after 4 years of President Trump realized the actually stood for lower government spending and lower government deficits, they wanted a small stimulus. There were others who thought if you send voters a check just before they vote, they would vote for the President since the letter would be signed by the President. The Democrats wanted a great deal more money for people, hospitals and state government who are not collecting millions in tax revenues because people are not spending on entertainment and restaurants they way they use to.

In an article by David Randall of Reuters, noted Jonathan Golub, chief US Equity Strategist for Credit Suisse saying “You have to assume in general that whatever level stimulus you would have received will probably be less because policy makers will say that the economy will mend.” Pfizer has announced a vaccine is 90% effective and will soon be able to used if they receive the necessary certification process.

Mohamed El-Erian, chief economist at Allianz SE, the corporate parent of PIMCO cautioned that stimulus relief was still required to minimize the pandemic’s economic and social effects. The inclination is to argue that the fiscal support is no longer needed. That would be wrong.

Jabaz Mathai, head of US rates strategy at Citigroup wrote neverthelesss a stimulus package would be ideal to create a bridge for the economy.

Will we receive a stimulus and how much is the question, in some ways some of the answers will be clarified after January 5 Georgia election for 2 Senate seats as the Senate is tied between the 2 parties.

Linking to dividend paying stocks, for companies which consistently earn profits a stimulus helps ensures people keep spending and paying their bills. We know there is a part of society which has not been able to work full time because of the shutdowns. Given the US economy is influenced by consumer spending, a stimulus package would help the economy and that would be a good thing.

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