There are plenty of confusing headlines being disseminated these
days regarding Washington's plans to deal with the so-called
"fiscal cliff." The latest tidbits center on pushing back any
actions until at least early next year. This lack of action amounts
to kicking the can down the road, as has been the norm in
Washington for the past several years. Let's all hope some form of
leadership emerges from either side on what can be done to avoid
delaying the inevitable difficult tax and spending-related
decisions. Remember, the markets tend to be at their worst when
uncertainty reigns supreme.
Getting into today's market action, we had another see-saw day
of ups and downs. Troubling headlines in the Middle East aren't
helping matters, as new conflicts between Israel and Palestine are
breaking out. Also, news of pasty maker Hostess shutting its doors
and sending 18,500 people to the unemployment line cast a cloud on
the already fractured jobs market.
As far as individual stocks were concerned, earnings remain the
top market mover on Wall Street. Dell Inc. (
DELL
) and The J.M. Smucker Company (
SJM
) ended lower following both companies' disappointing results. The
companies are going in the opposite direction when you look at a
long-term chart, with Dell continuing to lure in value buyers and
pushing lower and lower, while J.M. Smucker shares are just off
all-time highs. Elsewhere, Foot Locker (
FL
) delivered on another good quarter and in related news, Nike (
NKE
) shares rose partly off the Foot Locker report, but also on news
the company is splitting its shares 2-for-1 next month and raising
its dividend nicely (its yield still sits below 2% however).
Finally, shares of W.W. Grainger (
GWW
) and Las Vegas Sands (
LVS
) saw a bounce on some positive Wall Street analyst commentary.
Finally, Apple (
AAPL
) managed to squeeze out a gain after taking a trip down close to
the $500 a share range.
The Bounce Will Occur Right About…
It's so predictable how the business media sees a straight down
market and they frantically book every market "expert" they can
find to talk about when the reversal will happen. Rather than
getting into the fundamental reasons why some areas of the market
are getting hit harder than others, the big prize will go to
whomever called the bottom. This prize is all too appealing for
even the brighter minds that actually say sensible things most of
the time. They unfortunately get sucked into the media vortex of
the "bottom call" prize.
All I can tell you is that unless you have been lured into
buying the trading dips every other day (which had been working for
months prior to September), it is likely many traders/individuals
are now trapped in positions that have been hurt badly. I can tell
you that many money managers may have even seen their year go red
during the latest market swoon. For dividend investors, although
some of the names we like have come down, the opportunity to pick
up quality names at cheaper prices isn't something investors
looking to buy income-producing assets should be losing much sleep
about. We have kept an extra-lean list of recommendations for quite
a few months as our interpretation of what was in front of us made
us want to focus on the higher quality, higher-yielding liquid
names that we would want to own at lower prices if and when the
fundamentals (earnings) reality was going to kick in.
In the meantime, pay little mind to the daily bottom-calling you
have been probably watching all this week. This media hoopla should
not distract you from the job of building long-term wealth by
putting money to work in regular intervals and not trying to catch
the 2 or 3 point bounce in the momentum names the business media
knows gets trader types tuned in to watch.
Looking Toward Next Week
Looking ahead to the next week for stocks, third quarter
earnings will continue to come our way. On tap are results from the
likes of Campbell Soup (
CPB
), Lowe's (
LOW
), HJ Heinz (
HNZ
), and Hewlett-Packard (
HPQ
), just to name a few. Just a reminder, the market will be closed
next Thursday for the Thanksgiving holiday, and Black Friday will
be a half-day session (markets close at 1:00pm Est.) on what is
normally among the quietest days of the trading year.
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.