Archive for July, 2012

• Morning News: July 3, 2012
  Eddy Elfenbein, July 3rd, 2012 at 7:23 am

  Greece Must Pay Suppliers’ Arrears: EU Taskforce Head

  BRICs Priced for Economic Meltdown

  Europe’s Banking Chief Wields New Power in Crisis

  Malaysia’s IHH Healthcare Said to Seek $2 Billion in IPO

  Australia Holds Key Rate at 3.5% as Hiring, Currency Strengthen

  Sour Global Economy Drains Confidence From Deal Makers

  U.S. Manufacturing Shrinks, 1st Time in Nearly 3 Years

  California Lawmakers Pass Historic Foreclosure Protections

  Diamond Quits as Pressure Mounts on Barclays Over Libor

  Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others

  Let’s Put A Smile On Your Facebook

  Samsung Loses Bid To Lift Ban On U.S. Tablet Sales

  Microsoft Takes $6.2 Billion Charge, Slows Internet Hopes

  Cullen Roche: Wall Street’s Analysts Are Excessively Bearish

  Joshua Brown: This Is…How You Say? Ah Yes, Bad.

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• Dividends Up 15%
  Eddy Elfenbein, July 2nd, 2012 at 8:18 am

  Dividends continue to be popular. During the second quarter, the S&P 500 paid out $7.49 (adjusted to the index) in dividends. That’s a 14.9% increase over last year. That’s a payout ratio of less than 30% so it’s hardly stretching companies at all.

  Here’s a look at the S&P 500 (in blue, left scale) while its trailing dividends (in black, right scale). The two lines are scaled at a ratio of 50-to-1 so anytime the lines cross, the dividend yield is exactly 2%.

  

  I think it’s fascinating how closely the S&P 500 has tracked 50 times its dividend over the last 10 years (except during the financial crises).

• Morning News: July 2, 2012
  Eddy Elfenbein, July 2nd, 2012 at 7:04 am

  Euro Leaders Turn to Central Bank for Help to Tackle Crisis

  Agius Steps Down As British Bankers’ Association Chairman Amid Interest-Rate Probe

  Greece Accused of Wasting Time on Bailout Negotiations

  Top Auditor Says France Needs EUR43B to Respect 2012, 2013 Deficit Targets

  Japan Tankan Confidence Improves Even as Yen Limits Exports

  Iran Won’t Endure West’s Sanctions

  In Caymans, It’s Simple to Fill a Hedge Fund Board

  Bond Market Backs Obama With Record Demand for New Debt

  Euro Zone Factories Hit Hard In June, Job Cuts Rise

  Apple Pays $60 Million to End China IPad Fight With Proview

  Why Bristol And Astra Teamed Up To Buy Amylin In Unique $7 Billion Deal

  Linde to Fund Lincare Deal With $4.5 Billion Acquisition Loan

  Ingram Micro to Buy BrightPoint for $650 Million

  Pragmatic Capitalism: How the U.S. Economy will Impact the Presidential Election

  Roger Nusbaum: The Big Picture for the Week of July 1, 2012

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• Vacation Time
  Eddy Elfenbein, July 1st, 2012 at 8:58 pm

  

  I’m off to Newport this week for some sailing and to celebrate July 4th so posting will be light. There also won’t be a CWS Market Review this week. The stock market will close at 1 pm on Tuesday and will be closed all day on Wednesday. I expect trading volume to be light this week.

  The big news story will be Friday’s jobs report. The last report was a dud. Wall Street currently expects 100,000 nonfarm payrolls, and the unemployment rate to stay at 8.2%. They’ll also revise previous months’ numbers.

  A few weeks ago, Bernanke testified before the Joint Economic Committee and addressed employment:

  This apparent slowing in the labor market may have been exaggerated by issues related to seasonal adjustment and the unusually warm weather this past winter. But it may also be the case that the larger gains seen late last year and early this year were associated with some catch-up in hiring on the part of employers who had pared their workforces aggressively during and just after the recession. If so, the deceleration in employment in recent months may indicate that this catch-up has largely been completed, and, consequently, that more-rapid gains in economic activity will be required to achieve significant further improvement in labor market conditions.

  We’ll see if the sluggish trend continues. I’ll also be curious to see what Monday’s ISM report has in store. Anything above 52ish is fine. A number below that is a concern.

• The Buy List So Far
  Eddy Elfenbein, July 1st, 2012 at 9:32 am

  The first half of the year is over and thanks to a nice rally on Friday, our Buy List is up 7.61% for the year. That trails the S&P 500 just slightly — the index was up 8.31% for the first six months of 2012. Including dividends, our Buy List was up 8.71% while the S&P 500 was up 9.49%.

  We’ve beaten the S&P 500 for the last five years in a row. I’m not at all worried about us making it six straight. For the complete six-and-a-half year record of the Buy List, we’ve nearly doubled the return of the S&P 500, 49.72% to 25.19%.