We all depend on market wstchers some are on TV, the radio, maybe blogs and the newspapers. When we follow them we wonder how do they see the picture.

In an recent article Ian McGugan who writes in the Globe and Mail noted where he looks for information.

Factory Output

The JPMorgan Global Manufacturing PMI offers picture on wjat is happening on factory floors. The indec surveys purchasing managers. At the moment factories are in recession mold.

Where to find it: Google the JPMorgan Global Manufacturing PMI news release.

Expectations for global growth

German bonds are a good place to look. The 10 year bond are yielding very little because of the massive debt in the world.

Where to find it: Bloomberg.com

US bonds outlook

The key is to watch for deviations from the usual pattern.

Right now different parts of the US yield curve are sending different messages.

Where to find it: fred-.stlouisfed.org maintained by the Federal Reserve Bank of St. Louis. Search for 10 year Treasury minus 2 year Treasury

Retail Resilience

The keys are what are US consumers doing? If they keep shopping all is good

Right now shopping is good

Where to find it: the St Louis Fed site and search for advance real retail and food service sales. Select the series, edit graph and choose % change from year ago.

Linking to dividend paying stocks, we all use information to make decisions. Try to determine some of the key factors your influencers use then you can see for yourself if you agree or not agree and why. You might make better decisions.

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

 

 

 

 

 

 

President Trump loves tariffs but trade wars have consequences to the economy. Sometimes it is not good, sometimes it is not, and sometimes it has unintended consequences.

In an article from Reuters, it was noted a easy method to judge the strength of the economy is examining freight companies.

Union Pacific operates 32,000 rail network including the Los Angeles/Long Beach port where the majority of trade between China and the US cargo flows.

Kansas City Southern Railway crosses into Mexico, this cross border traffic contributes a large share of its revenue.

Approximately 70% of US shipment tonnage is through trucking companies. The largest trucking company is JB Hunt Transport.

Packages delivery companies include FedEx and UPS, will increasing globalization the companies have spent upgrading their international abilities, trade pressures will cause increase under use of these resources.

Linking to dividend paying stocks, often examining how well the supply system works will tell you how the company is doing. Although operations are the least srxy part of the company, every company is dependent on the smooth operation for steady income.

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

 

 

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The newspaper is something that used to be delivered to every home and had many uses. If you had a wood burning stove the newspaper help with the fire; if you had an outhouse the paper had uses othet than reading. People looked forward to their paper and to read the news, business, sports and if they knew anyone in the paper. The other side of the newspaper was the business side. Media was very profitable because of its reach advertising went to the papers You may remember looking through the classifieds, often that was 40% of the business. The internet arrives and websites are made to classifieds, what happens to the newspaper? Jill Abramson had written a good book called Merchamts of Truth published by Simon & Schuster, NY, 2019 in which she examines the changes in the newspaper business. Those of us that read a paper are a diminishing breed for everything is on line. If you are an advertiser do you still use the newspaper for the majority of your ad dollars, I would hope the answer is no

In the book, Ms. Abramson reviews buzzfeed, VIce, the New York Times, and The Washington Post and the connection into Facebook to gain more readers. With social media, they analyze everything – how long did you spend on an article? Did you like it? Did you share it? And the list goes on. If you analyze it, then newspaper writing changes to meet the analytics.

Linking to dividend paying stocks, the newspaper industry is a textbook case of having profitable business for years with a good dividend and then it changed forever. If you sold newspaper stocks and bought Facebook and Google you would still be in the same position, but did many people do that till later? We often think the industry can change and all will be good,  but reality is change to what? What are the alternatives, do we pay attention to them?

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

 

 

 

 

 

 

 

Amazon is the second largest private sector workers with 630,000, Walmart is the biggest. An on going problem is the right body with the right skills needed to accomplish the work of Amazon. According to am article by Joseph Pisani of the Associated Press Amazon will retrain at least 100,000 workers or those already working for the company in other positions.

For Amazon this action should cut down on the costs of employee turnover, and may even attract more people to get their foot inside the door. Most of the training will be free to Amazon employees.

LInking to dividend paying stocks as baby boomers retire the job market is changing and large companies can afford to retrain their employees. It is more important to understand the job turnover at the company and how after determining good people to hire the company keeps them for 10 years.

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

 

 

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We all invest in the stock markets to increase our wealth or make more money, then we can have options what we wish to do with the money. After 6 months of market activity the general market is up and that is a good thing. We know markets go up and they go down, but we are not sure when that happens. If you made gains, then you should consider looking at the volatility of your portfolio. In a recent article in the press, Emily Halverson-Duncan of Morningstar Research examined her data base of 2,000 plus names to find some lower volatility stocks. Her criteria was:

Stocks are ranked based on earnings-per-share or EPS variability (a measure of variability in the monthly EPS values across the latest 5 years, low values preferred).

Free cash flow yield which is a measure of profitability and high values are good.

5 year beta less than 1.1 (beta measures a company’s sensitivity relative to historical changes in the benchmark – using the S&P 500).

EPS variability in the lower half of its peers (as of the date of the chart the number is 13.1% or less).

Industry relative debt-to-equity ratio in the lower half of peers (the present number is 1.0 or less).

Market capitalization in the top 1/3 of peers (the present number is $6.9 billion or more).

Company                   Mkt Cap   Div         EPS           Industry Rel     FCF               5Yr

($bil)         Yield       Var %       D/E Ratio         Yield %         Beta

AGNC Invest               9.119       11.3       7.2               0.0                   19.1           0.2

Reinsurance Group   9.926          1.5       5.4               1.0                     14.2           0.7

AFLAC Inc                   42.350       1.9       5.2               0.6                     13.8             0.7

Henry Schein               10.310       0.0         2.0              0.8                       6.8             0.8

Infosys Tech                 46.260       2.3         1.6           0.0                       4.0             0.5

Medtronic PLC           131.580       2.2         1.9           1.0                      3.8           0.7

Amdocs                           8.735       1.8         2.6             0.0                       5.1           0.4

AT&T                           250.321       5.9         3.4           0.8                       6.7          0.6

Novo-Nordisk             120.284       2.4           3.0           0.1                     4.1           0.6

The other names on the list were Hartford Financial Services, Novartis, JM Smucker, Church & Dwight Co Inc, and CNA Financial

Linking to dividend paying stocks, list such as this one allows you to see there are many alternatives to purchase and you need to narrow the field. The tougher the criteria, the least likely we will lose money and when you invest, not losing money is a very good objective. If you invest in profitable stocks which pay dividends in the long term your wealth will increase.

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

Samsung Electronics Co Ltd forecast a steep plunge in profit as the US China trade war wrecks havoc on global chip and smartphone markets.

In an article by Ju-Min Park and Heekyong Yang of Reuters the South Korean tech giant is on target to post profit declines as chip prices fell on a global supply glut. Adding to the problem is US trade sanctions on Chinese telecom maker Huawei Technologies who is a key Samsung client.

Another factor is Korea and Japan are having disagreements over apologizes over Japan use of forced wartime labor in WW II. Japan had imposed curbs on exports to South Korea of materials used in memory chips and smartphones.

April June operating profit fell 56% to $7.2 billion or 6.5 trillion won on revenues of 56 trillion won.

Linking to dividend paying stocks, here is a company which is technically outside the US-China trade war but is entangled in it. The Japanese and Germans both used forced labor to run their war machinery in WW II, the effects linger more than 60 years later. Although profits are down, the company is still genetating profits and one day things will return to normal. How long should you wait?

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

 

 

 

The biggest brewer in the world is AB InBev or Anheuser-Busch InBev and one of the methods they became the biggest is through easy credit. In late 2016 the company paid $100 billion for SABMiller, the debt is still on the books and one method to reduce debt is still a piece of equity.

The Asia Pacific business should raise just under $10 billion through the sale of 1.6 billion primary shares. According to the article by Alun John and Sumeet Chatterjee the pricing is expected to be between 40 and 47 Hong Kong dollars or $6.72 and 7.90. The pricing vales Budweiser Asia at 16 to 18 times its enterprise vale to EBITDA.

Linking to dividend paying stocks, billion dollar takeovers are sexy and make wonderful copy, but they come with paying down the debt. You will hear at cost cutting, potential savings but you will need you need to ask is growth enough or should I look for alternatives and come back in a year or 2?

Postcript the ipo is on the shelf for now.

 

 

 

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

 

 

 

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At the end of June the automakers released their 6 month sales and they were mixed. According to an article by Nick Carey and Ankit Ajmera of Reuters the SUV and truck segment had strong sales while passenger car sales continued a long running decline.

For automakers this is good news because the profits are made in trucks and SUVs. The big news was Chyrsler’s Ram truck outsold Chevy’s Silverado by more than 40,000 units.

In terms of passenger vehicles the economy, high interest rates and competition from millions of nearly new off lease vehicles combined for fewer new car sales.

The market is flat compared to the expected downturn which says sometimes about market stability.

Linking to dividend paying stocks, we all have indicators to understand how the economy is doing. For many years car sales were an easy indicator because most people drove to work and wanted 2 cars in the garage. That is changing to affordability and younger people not wanting to own, but still like to drive. Whatever indicators you use ensure they have the same meaning to the economy or you will have to find more meaningful ones as the economy chsnges.

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

 

 

 

 

 

 

In every industry group the actions of the government can and does have an effect on the industry. In the banking world the federal reserve and capital requirements are the most important aspects to profitability. The greater the capital the more the bank can lend and be more profitable.

In late June, the federal reserve approved the capital plans of the big banks, giving them a clean bill of health.

In an article from Reuters, Jefferies analyst Ken Usdin estimated the average bank would be returning about 10.5% of its market capitalization in dividends and buybacks from the third quarter of 2019 to the second quarter of 2020.

Linking to dividend paying stocks, for many of these stocks the government and business are in partnership and work together. Good news by the government means good news for investors.

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