Treasury yields slide as China coronavirus spreads

U.S. government debt prices were higher on Thursday morning as the death toll resulting from the China coronavirus continues to rise. At around 2:35 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7551%, while the yield on the 30-year Treasury bond fell to 2.2027%. The death toll from the pneumonia-like illness originating out of Wuhan, China, rose to 17 on Wednesday, with 571 cases now detected throughout Asia and as far away as t


U.S. government debt prices were higher on Thursday morning as the death toll resulting from the China coronavirus continues to rise.
At around 2:35 a.m.
ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7551%, while the yield on the 30-year Treasury bond fell to 2.2027%.
The death toll from the pneumonia-like illness originating out of Wuhan, China, rose to 17 on Wednesday, with 571 cases now detected throughout Asia and as far away as t
Treasury yields slide as China coronavirus spreads Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: elliot smith
Keywords: news, cnbc, companies, spreads, world, toll, usthe, death, china, treasury, health, yields, yield, rose, coronavirus, wuhan, slide


Treasury yields slide as China coronavirus spreads

U.S. government debt prices were higher on Thursday morning as the death toll resulting from the China coronavirus continues to rise.

At around 2:35 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7551%, while the yield on the 30-year Treasury bond fell to 2.2027%.

The death toll from the pneumonia-like illness originating out of Wuhan, China, rose to 17 on Wednesday, with 571 cases now detected throughout Asia and as far away as the U.S.

The World Health Organization will reconvene on Thursday to determine whether to declare a global health emergency and devise a plan to contain the outbreak.


Company: cnbc, Activity: cnbc, Date: 2020-01-23  Authors: elliot smith
Keywords: news, cnbc, companies, spreads, world, toll, usthe, death, china, treasury, health, yields, yield, rose, coronavirus, wuhan, slide


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Treasury yields rise as earnings and abating virus fears boost risk-on trades

U.S. government debt prices were lower on Wednesday morning as investors flocked back into risk assets, after China unveiled measures to rein in the spread of a deadly virus . ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.7778%, while the yield on the 30-year Treasury bond rose to 2.2351%. The outbreak of a new strain of coronavirus in China’s Wuhan region sent Treasury yields to a two-week low on Tuesday, with experts calling back t


U.S. government debt prices were lower on Wednesday morning as investors flocked back into risk assets, after China unveiled measures to rein in the spread of a deadly virus .
ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.7778%, while the yield on the 30-year Treasury bond rose to 2.2351%.
The outbreak of a new strain of coronavirus in China’s Wuhan region sent Treasury yields to a two-week low on Tuesday, with experts calling back t
Treasury yields rise as earnings and abating virus fears boost risk-on trades Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: elliot smith
Keywords: news, cnbc, companies, yields, riskon, treasury, earnings, investors, china, wuhan, rise, measures, abating, risk, boost, yield, virus, trades, sent, fears


Treasury yields rise as earnings and abating virus fears boost risk-on trades

U.S. government debt prices were lower on Wednesday morning as investors flocked back into risk assets, after China unveiled measures to rein in the spread of a deadly virus .

At around 5:00 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.7778%, while the yield on the 30-year Treasury bond rose to 2.2351%.

The outbreak of a new strain of coronavirus in China’s Wuhan region sent Treasury yields to a two-week low on Tuesday, with experts calling back the economic fallout from the Severe Acute Respiratory Syndrome (SARS) crisis in 2003. Fears of a global pandemic sent investors running for safety and saw stock markets tumble.

However, China on Wednesday announced sweeping measures to contain the virus, which has killed nine people and infected more than 400. A first U.S. case was confirmed Tuesday in Washington State, but health officials have said the affected individual “poses little risk” to the public.


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: elliot smith
Keywords: news, cnbc, companies, yields, riskon, treasury, earnings, investors, china, wuhan, rise, measures, abating, risk, boost, yield, virus, trades, sent, fears


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Jamie Dimon actually does own negative-yielding bonds, and you may, too

J.P. Morgan Private Investments has a 24.4% ownership stake in the Vanguard Total International Bond (BNDX) fund, according to FactSet. The next biggest concentration is in France, which also has negative yields through 10 years. However, for J.P. Morgan and other investors in the ETF, negative-yielding debt can serve as an effective diversification tool. Negative yields imply that those lending money to governments are paying to do so. The SPDR Bloomberg Barclays International Bond ETF has cons


J.P. Morgan Private Investments has a 24.4% ownership stake in the Vanguard Total International Bond (BNDX) fund, according to FactSet.
The next biggest concentration is in France, which also has negative yields through 10 years.
However, for J.P. Morgan and other investors in the ETF, negative-yielding debt can serve as an effective diversification tool.
Negative yields imply that those lending money to governments are paying to do so.
The SPDR Bloomberg Barclays International Bond ETF has cons
Jamie Dimon actually does own negative-yielding bonds, and you may, too Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: jeff cox
Keywords: news, cnbc, companies, yields, debt, morgan, international, bonds, does, negativeyielding, bond, dimon, fund, yield, actually, stake, negative, jamie


Jamie Dimon actually does own negative-yielding bonds, and you may, too

J.P. Morgan Private Investments has a 24.4% ownership stake in the Vanguard Total International Bond (BNDX) fund, according to FactSet. J.P. Morgan Chase Bank also has a small piece of the fund, which has $25 billion in assets and is the largest ETF in its class.

The ownership may not be direct. But the investing arm of Dimon’s business indeed has a significant stake in negative-yielding debt through a popular exchange-traded fund whose biggest holding is in a German bond that matures in 2029 and carries a yield of about minus 0.26%.

In addition to holding German fixed income instruments, the highest concentration of its total investments by geography is in Japan, which has negative rates on its yield curve all the way through 10 years. The next biggest concentration is in France, which also has negative yields through 10 years.

Institutions own 63% of the BNDX, leaving more than one-third of the stake in the hands of retail investors looking for some global fixed income exposure in their portfolios.

“I would never buy a negative-rate bond, not unless I was forced,” Dimon told CNBC’s “Squawk Box” at the World Economic Forum in Davos. “In history, whenever you’ve seen anything like that, it doesn’t necessarily end well.”

However, for J.P. Morgan and other investors in the ETF, negative-yielding debt can serve as an effective diversification tool.

Negative yields imply that those lending money to governments are paying to do so. That’s not really the case, though, and the distinction is important for the $11 trillion or so of global sovereign debt that carries below-zero yields.

Buyers of the bonds instead pay a premium above 100 cents on the dollar for this debt. When bond-holders pay more for the bond than they receive in yield over the duration, that makes the rate negative as prices and yields move in opposite direction. That means that as those yields go more “negative,” it’s because the prices are rising, an equation that helps bond funds.

Over the past year, the BNDX fund has gained about 7.9%, well below the 26% surge for the S&P 500 but just below its fixed income benchmark, according to Morningstar.

“The funds that were invested in these [bonds] had a pretty good year last year through September,” said Nicholas Colas, co-rounder of DataTrek Research. “The joke was 2019 was when you bought stocks for yield and bonds for capital appreciation.”

The iShares International Treasury Bond is another such fund, though its biggest holdings are in Ireland and Portugal. The SPDR Bloomberg Barclays International Bond ETF has considerable concentration in Japan.


Company: cnbc, Activity: cnbc, Date: 2020-01-22  Authors: jeff cox
Keywords: news, cnbc, companies, yields, debt, morgan, international, bonds, does, negativeyielding, bond, dimon, fund, yield, actually, stake, negative, jamie


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Here are top value investor Bill Nygren’s favorite stock picks and how he’s trading Apple now

In a stock market where little is cheap, longtime value investor Bill Nygren revealed what he’s buying. The manager said on CNBC’s “Halftime Report” Tuesday that he holds a “large position” in auto financing company Ally Financial, citing its cheap valuation. In the meantime, you are getting a 2.5% yield,” Nygren said. Ally Financial rallied nearly 35% in 2019, beating the broad market by about 5 percentage points. It underperformed the market in the new year, however, returning just 0.5%.


In a stock market where little is cheap, longtime value investor Bill Nygren revealed what he’s buying.
The manager said on CNBC’s “Halftime Report” Tuesday that he holds a “large position” in auto financing company Ally Financial, citing its cheap valuation.
In the meantime, you are getting a 2.5% yield,” Nygren said.
Ally Financial rallied nearly 35% in 2019, beating the broad market by about 5 percentage points.
It underperformed the market in the new year, however, returning just 0.5%.
Here are top value investor Bill Nygren’s favorite stock picks and how he’s trading Apple now Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: yun li
Keywords: news, cnbc, companies, stock, yield, nygrens, manager, hes, underperformed, bill, financial, cheap, apple, picks, value, investor, nygren, trading, market, valuationit, favorite


Here are top value investor Bill Nygren's favorite stock picks and how he's trading Apple now

Nygren is a portfolio manager at Oakmark Funds. His fund has outperformed the S&P 500 over the past 10 years. He was named on Morningstar’s ultimate stock picker list.

In a stock market where little is cheap, longtime value investor Bill Nygren revealed what he’s buying.

The manager said on CNBC’s “Halftime Report” Tuesday that he holds a “large position” in auto financing company Ally Financial, citing its cheap valuation.

“It sells at seven times earnings, below book value. It’s buying back a lot of the stocks each year. In the meantime, you are getting a 2.5% yield,” Nygren said.

Ally Financial rallied nearly 35% in 2019, beating the broad market by about 5 percentage points. It underperformed the market in the new year, however, returning just 0.5%.


Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: yun li
Keywords: news, cnbc, companies, stock, yield, nygrens, manager, hes, underperformed, bill, financial, cheap, apple, picks, value, investor, nygren, trading, market, valuationit, favorite


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Treasury yields sink as Wuhan virus outbreak spooks risk markets

U.S. government debt prices were sharply higher Tuesday morning after an outbreak of a new strain of coronavirus linked to pneumonia in China sent investors fleeing risk assets. At around 2:15 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7917%, while the yield on the 30-year Treasury bond was also down at 2.2464%. TreasurysThe outbreak of a new coronavirus in Wuhan, China has killed four people with confirmed cases exceeding 200


U.S. government debt prices were sharply higher Tuesday morning after an outbreak of a new strain of coronavirus linked to pneumonia in China sent investors fleeing risk assets.
At around 2:15 a.m.
ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7917%, while the yield on the 30-year Treasury bond was also down at 2.2464%.
TreasurysThe outbreak of a new coronavirus in Wuhan, China has killed four people with confirmed cases exceeding 200
Treasury yields sink as Wuhan virus outbreak spooks risk markets Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: elliot smith
Keywords: news, cnbc, companies, travel, markets, spooks, yield, china, coronavirus, sink, virus, wuhan, risk, syndrome, confirmed, yields, outbreak, treasury


Treasury yields sink as Wuhan virus outbreak spooks risk markets

U.S. government debt prices were sharply higher Tuesday morning after an outbreak of a new strain of coronavirus linked to pneumonia in China sent investors fleeing risk assets. At around 2:15 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.7917%, while the yield on the 30-year Treasury bond was also down at 2.2464%.

Treasurys

The outbreak of a new coronavirus in Wuhan, China has killed four people with confirmed cases exceeding 200 ahead of the Lunar New Year holiday, during which hundreds of millions of people are expected to travel. Late on Monday, Chinese authorities confirmed that the virus is contagious, and experts have called back the economic fallout from the deadly Severe Acute Respiratory Syndrome (SARS) crisis in 2003.


Company: cnbc, Activity: cnbc, Date: 2020-01-21  Authors: elliot smith
Keywords: news, cnbc, companies, travel, markets, spooks, yield, china, coronavirus, sink, virus, wuhan, risk, syndrome, confirmed, yields, outbreak, treasury


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One S&P 500 sector is enjoying a stealth rally to records

There’s been a surprising winner as markets have rallied to records — the utilities sector. The XLU utilities ETF is up 3% this week, nearly double the gain on the S&P 500, and the top performer on markets. While the utilities sector yields 3%, the 10-year holds at 1.8%. The other high-dividend sectors are REITs and energy. Gordon adds that American Electric Power and Dominion Energy look like two good candidates to get exposure to the sector.


There’s been a surprising winner as markets have rallied to records — the utilities sector.
The XLU utilities ETF is up 3% this week, nearly double the gain on the S&P 500, and the top performer on markets.
While the utilities sector yields 3%, the 10-year holds at 1.8%.
The other high-dividend sectors are REITs and energy.
Gordon adds that American Electric Power and Dominion Energy look like two good candidates to get exposure to the sector.
One S&P 500 sector is enjoying a stealth rally to records Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: keris lahiff
Keywords: news, cnbc, companies, rally, sectors, yield, xlu, stealth, 500, highdividend, yields, gordon, utilities, theyre, sector, records, week, enjoying


One S&P 500 sector is enjoying a stealth rally to records

There’s been a surprising winner as markets have rallied to records — the utilities sector.

The XLU utilities ETF is up 3% this week, nearly double the gain on the S&P 500, and the top performer on markets.

Todd Gordon, founder of TradingAnalysis.com, sees signs its outperformance can continue.

“The story begins, I think, with yields, no surprise here. We’ve seen U.S. bond yields drop,” Gordon said on CNBC’s “Trading Nation” on Thursday. “We’re moving lower here in the 10-year yield following a very clear correlation of declining yields and strong utilities. We’re seeing the XLU … break to new highs so obviously that’s a very strong indicator.”

Bond yields and high-dividend sectors such as utilities move inversely — investors hunt for alternative sources of yield in defensive trades such as utilities and real estate investment trusts.

“Sometimes I’ve seen these sectors kind of lead the underlying bond market, which is very strange, so perhaps utilities are signaling that we might see lower yields to come,” Gordon added.

Gina Sanchez, CEO of Chantico Global, says utilities could still outperform despite sky-high multiples.

“We have utilities at really high multiples — I mean, utilities are regulated, they’re slow growers, they’re great payers, they’re not supposed to be at multiples of 21 times,” Sanchez said during the same segment. “And yet that’s where they are, and yet their dividends are still almost 3%, they’re still the third-highest-paying dividend sector in the S&P.”

While the utilities sector yields 3%, the 10-year holds at 1.8%. The other high-dividend sectors are REITs and energy.

“That basically tells you that there’s actually still going to be some capital that will be attracted to that dividend, especially, to Todd’s point, if rates continue to go low and it will drive investors into high-dividend sectors,” said Sanchez.

Gordon adds that American Electric Power and Dominion Energy look like two good candidates to get exposure to the sector. AEP is up 4% this week, while Dominion has climbed more than 1%.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2020-01-17  Authors: keris lahiff
Keywords: news, cnbc, companies, rally, sectors, yield, xlu, stealth, 500, highdividend, yields, gordon, utilities, theyre, sector, records, week, enjoying


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Treasury yields turn lower as investors await interim US-China trade deal

U.S. government debt prices turned higher Tuesday morning, as investors await the planned signing of an interim trade deal between the world’s two largest economies. ET, the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.8354%, while the yield on the 30-year Treasury bond was also lower at around 2.2950%. Market focus is largely attuned to global trade developments, with the U.S. and China set to ratify their so-called “phase one” trade deal on Wednesday.


U.S. government debt prices turned higher Tuesday morning, as investors await the planned signing of an interim trade deal between the world’s two largest economies.
ET, the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.8354%, while the yield on the 30-year Treasury bond was also lower at around 2.2950%.
Market focus is largely attuned to global trade developments, with the U.S. and China set to ratify their so-called “phase one” trade deal on Wednesday.

Treasury yields turn lower as investors await interim US-China trade deal Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-14  Authors: sam meredith
Keywords: news, cnbc, companies, turn, turned, interim, trade, await, yield, currency, yields, deal, wednesdayahead, uschina, worlds, lower, designation, treasury, investors


Treasury yields turn lower as investors await interim US-China trade deal

U.S. government debt prices turned higher Tuesday morning, as investors await the planned signing of an interim trade deal between the world’s two largest economies.

At 3:45 a.m. ET, the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.8354%, while the yield on the 30-year Treasury bond was also lower at around 2.2950%.

Market focus is largely attuned to global trade developments, with the U.S. and China set to ratify their so-called “phase one” trade deal on Wednesday.

Ahead of the preliminary agreement, the U.S. Treasury announced on Monday that it had dropped China’s designation as a currency manipulator.

The decision comes more than five months after the Treasury Department formally made the designation, with Beijing now on a “monitoring list” for currency practices along with nine other countries, including Germany, Italy and Japan.


Company: cnbc, Activity: cnbc, Date: 2020-01-14  Authors: sam meredith
Keywords: news, cnbc, companies, turn, turned, interim, trade, await, yield, currency, yields, deal, wednesdayahead, uschina, worlds, lower, designation, treasury, investors


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Treasury yields rise slightly to start the week

Treasury yields climbed slightly on Monday as investors await the planned signing of a so-called “phase one” trade deal between the U.S. and China later this week. The yield on the benchmark 10-year Treasury note, which moves inversely to prices, was higher at around 1.84%, while the yield on the 30-year Treasury bond was also higher at around 2.10%. U.S. Treasury Secretary Steven Mnuchin said Sunday that he expects an interim trade deal between Washington and Beijing will add significantly to e


Treasury yields climbed slightly on Monday as investors await the planned signing of a so-called “phase one” trade deal between the U.S. and China later this week.
The yield on the benchmark 10-year Treasury note, which moves inversely to prices, was higher at around 1.84%, while the yield on the 30-year Treasury bond was also higher at around 2.10%.
U.S. Treasury Secretary Steven Mnuchin said Sunday that he expects an interim trade deal between Washington and Beijing will add significantly to e
Treasury yields rise slightly to start the week Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: yun li sam meredith, yun li, sam meredith
Keywords: news, cnbc, companies, fed, week, worth, rise, trade, deal, start, yield, yields, treasury, president, billion, worlds, slightly, set


Treasury yields rise slightly to start the week

Treasury yields climbed slightly on Monday as investors await the planned signing of a so-called “phase one” trade deal between the U.S. and China later this week.

The yield on the benchmark 10-year Treasury note, which moves inversely to prices, was higher at around 1.84%, while the yield on the 30-year Treasury bond was also higher at around 2.10%.

U.S. Treasury Secretary Steven Mnuchin said Sunday that he expects an interim trade deal between Washington and Beijing will add significantly to economic growth in 2020.

The world’s two largest economies plan to sign a phase-one trade deal on Wednesday, which includes China purchasing $200 billion worth of U.S. goods over the next two years and the U.S. reducing tariffs on about $120 billion worth of Chinese products.

Investors are likely to closely monitor speeches from policymakers at the U.S. central bank, with Boston Fed President Eric Rosengren, Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari all set to comment on the world’s largest economy.

The U.S. Treasury is set to auction $42 billion in 13-week bills and $36 billion in 26-week bills on Monday.

On the data front, Federal Budget figures for December will be released at 2 p.m. ET.


Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: yun li sam meredith, yun li, sam meredith
Keywords: news, cnbc, companies, fed, week, worth, rise, trade, deal, start, yield, yields, treasury, president, billion, worlds, slightly, set


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This was the best strategy for picking stocks the last 10 years

Picking stocks with the highest dividend yield was the best strategy last decade, according to Bank of America. This strategy is to blindly buy the stocks with the highest dividend yields in the market, a move that can lead investors into some of the very riskiest stocks. The dividend yield is the dividend per share divided by the price per share. The low interest rates also made dividend yields more attractive relative to bond yields, and the stocks bounced back. Though it had a strong run over


Picking stocks with the highest dividend yield was the best strategy last decade, according to Bank of America.
This strategy is to blindly buy the stocks with the highest dividend yields in the market, a move that can lead investors into some of the very riskiest stocks.
The dividend yield is the dividend per share divided by the price per share.
The low interest rates also made dividend yields more attractive relative to bond yields, and the stocks bounced back.
Though it had a strong run over
This was the best strategy for picking stocks the last 10 years Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: jesse pound
Keywords: news, cnbc, companies, picking, stocks, yields, highest, strategy, stock, bank, high, yield, best, dividend


This was the best strategy for picking stocks the last 10 years

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 9, 2020.

Picking stocks with the highest dividend yield was the best strategy last decade, according to Bank of America.

But don’t expect that same strategy to work again this decade.

Stocks with the highest dividend yields quadrupled in value over the last decade, outpacing an equal-weighted S&P 500 by 120%, according to a Bank of America note published Monday. The trailing 10-year performance of stocks with the biggest dividend yields ended last year at its highest level since 2001, according to Bank of America. The firm divided up the S&P 500 into deciles by factors to find the results.

To be clear, this strategy is not to be confused with most dividend investing strategies, where investors hunt for stocks with high payouts but also dependable balance sheets.

This strategy is to blindly buy the stocks with the highest dividend yields in the market, a move that can lead investors into some of the very riskiest stocks. For example, the stock in the S&P 500 with the highest dividend yield at this time is troubled retailer Macy’s, at 8.5%. The dividend yield is the dividend per share divided by the price per share. Macy’s yield is so high because the stock price has plummeted.

The last decade had a unique set of circumstances that made these risky stocks winners.

Following the financial crisis, stock prices plummeted for financial companies and others that investors feared were on the brink of insolvency, pushing the dividend yields of those stocks to high levels. For those companies and likely Macy’s today, the high dividend yields were a sign that they were risky bets — and that those dividends may soon be cut or go away completely if a company ran into trouble or even went bankrupt.

But with the Federal Reserve keeping interest rates low, and helping offload toxic assets from the financial system through quantitative easing, those companies were able to survive as the economy slowly recovered. The low interest rates also made dividend yields more attractive relative to bond yields, and the stocks bounced back.

“Ultralow rates and a paucity of safe income opportunities likely fueled High Dividend Yield, and its close cousin Dividend Growth (+243%) also numbered among the decade’s top 5,” Bank of America said.

Though it had a strong run over the long-term, the high dividend strategy would not have been the best bet in 2019. The absolute return of the high dividend portfolio was 22.65% in 2019, while the S&P 500 rose about 29% on price alone.


Company: cnbc, Activity: cnbc, Date: 2020-01-13  Authors: jesse pound
Keywords: news, cnbc, companies, picking, stocks, yields, highest, strategy, stock, bank, high, yield, best, dividend


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Dividend stocks look attractive with a volatile year that nets measly returns expected ahead

Unlike growth stocks that have led the market’s record-long bull run, dividend stocks typically don’t offer dramatic price appreciation, but they do provide investors with a steady stream of income. In comparison, a popular dividend-focused exchange-traded fund — iShares Select Dividend ETF — currently has a dividend yield of 3.6%. Stocks with the fastest dividend growth include Citigroup, pharmaceutical company Eli Lilly and medical equipment and drug producer Baxter, UBS said. The basket has a


Unlike growth stocks that have led the market’s record-long bull run, dividend stocks typically don’t offer dramatic price appreciation, but they do provide investors with a steady stream of income.
In comparison, a popular dividend-focused exchange-traded fund — iShares Select Dividend ETF — currently has a dividend yield of 3.6%.
Stocks with the fastest dividend growth include Citigroup, pharmaceutical company Eli Lilly and medical equipment and drug producer Baxter, UBS said.
The basket has a
Dividend stocks look attractive with a volatile year that nets measly returns expected ahead Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-01-11  Authors: yun li
Keywords: news, cnbc, companies, nets, volatile, stocks, yields, returns, attractive, investors, strategies, yield, income, measly, expected, market, ahead, dividend, growth, look


Dividend stocks look attractive with a volatile year that nets measly returns expected ahead

Traders work the floor of the New York Stock Exchange on August 23, 2019 in New York. Don Emmert | AFP | Getty Images

Stocks may be at record highs, but 2020 has already proven to be a volatile year, leading a growing cohort of Wall Street strategists to recommend stable dividend-paying investments. Favorite names recommended by the banks include Citgroup, Verizon and Cisco. There are also a bevy of exchange-traded funds which track the style. Unlike growth stocks that have led the market’s record-long bull run, dividend stocks typically don’t offer dramatic price appreciation, but they do provide investors with a steady stream of income. This type of strategy can bode well for investors in a much riskier year ahead grappling with Middle East unrest, more China trade talks and a U.S. presidential election. “Dividend strategies have increasingly become top of mind for investors that want to participate in the up market that continues but they want to be prepared for the volatility that feels like is around the corner,” said Todd Rosenbluth, head of ETF & mutual fund research at CFRA.

Wall Street analysts largely see much more modest returns in 2020 following a historic run last year that saw the S&P 500 soaring nearly 29%. The average year-end target for the benchmark comes to 3,345, a measly 2% gain, according to CNBC’s Market Strategist Survey. In comparison, a popular dividend-focused exchange-traded fund — iShares Select Dividend ETF — currently has a dividend yield of 3.6%. “If returns are more muted, the income component of the total return is going to play a more meaningful role,” Rosenbluth said.

Time to shift

Since the end of 2019, a slew of top financial institutions including Goldman Sachs, UBS and Bank of America Merrill Lynch have started advising clients to buy dividend-paying stocks and strategies to hedge against rising risks and an aging bull market. Investors seem to have already warmed to the idea. In the fourth quarter alone, dividend ETFs experienced more than $10 billion in new money, which was more than any other factor-oriented strategies, according to data from CFRA. The inflows came even as the stock market rallied into the year-end, a sign that investors were getting nervous. “How to hedge against things going wrong? We now prefer utilities (pure domestic, stable earnings) over staples as a way to generate high dividend,” Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America, said in her “year ahead” outlook. UBS warned clients of a continued slowdown in the economy last month and screened for a handful of dividend growers to combat that. Stocks with the fastest dividend growth include Citigroup, pharmaceutical company Eli Lilly and medical equipment and drug producer Baxter, UBS said. There are a variety of ETFs on the market that lump a bunch of high-dividend stocks together. Below are the top five dividend-focused ETFs arranged by assets, according to ETF.com.

‘Low-for-longer interest rates’

Adding to dividend strategies’ appeal is how low interest rates are, which makes bonds less attractive to investors seeking income. The Federal Reserve slashed borrowing cost three times in 2019, pushing 10-year Treasurys below 2% and lower than the S&P 500’s dividend yield of 2.1% last year. “Low-for-longer interest rates are a reality, no longer a forecast,” Steven Major, HSBC’s global head of fixed income research, said in note. “The decade of denial saw expectations of cyclical recovery often disappointed and a similarly misplaced belief in the view that bond yields would rise.” In an environment of disappearing yields, Goldman started touting its dividend growth basket as one of its two recommended strategies in 2020, which “offers longer-term investors a premium yield while positioning for a value rotation.” The basket has a dividend yield of 3.6% and twice the S&P 500’s dividend growth through 2021, Goldman said. Stocks in the Goldman portfolio include AT&T, Verizon, Morgan Stanley, Amgen and Cisco.

Record payments

Time could be ripe for dividend stocks to stage a comeback after a decade of underperformance. They have trailed the S&P 500 consistently for the past 10 years as growth stocks with rapid profit increases have enjoyed most of the love. Last year, stocks with the highest dividend yields underperformed stocks with low or no yields as the S&P 500 notched its best annual performance in six years, according to Bespoke Investment Group.


Company: cnbc, Activity: cnbc, Date: 2020-01-11  Authors: yun li
Keywords: news, cnbc, companies, nets, volatile, stocks, yields, returns, attractive, investors, strategies, yield, income, measly, expected, market, ahead, dividend, growth, look


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