The market was getting a bit of a reprieve today from the recent
selling, but investors moved back to the sidelines by the close.
The best part of today's headlines for consumers could be the
much-larger-than expected build-up in oil reserves. Oil prices
dipped on the news, which could pave the way for lower gasoline
prices ahead for consumers.
Starting with the earnings positives, nice numbers and guidance
out of Tupperware (
) and Lockheed Martin (
) had both of those companies seeing higher prices throughout the
session. On a non-dividend related note, Facebook (
) was able to give investors something to cheer about finally as
the company reported a good quarter. How much the stock can sustain
this morning's bounce will come under scrutiny, as plenty of
additional Facebook shares will be coming to markets in coming
months from company insiders/investors as IPO lock-up expirations
We had plenty of stocks disappointing investors this morning,
with names like Norfolk Southern (
), Corning (
), Lorillard (
), Altera Corp (
), and Brinker International (
) all seeing red following their earnings announcements.
The Times, They are a Changin'…
I continue to see the modern global economic landscape as one
that is undergoing massive changes. Not only are consumers behaving
differently, but corporations are also responding in new ways to
constant pressures from the investment community. Public companies
are under extreme pressure deliver bottom-line results each
quarter, despite a global economic pullback. The only solution to
growing profits amid weaker revenue is to cut costs - and that
means eliminating jobs (especially higher-paying ones). These
factors, among others, will combine to drastically alter investors'
gameplans in the coming years.
A recent note from automotive research firm Polk indicates
Americans can now expect to buy fewer new cars during their
lifetime (approximately 4 less than they would have when they reach
their peak buying age of 76 years old). Why is this trend
happening? Primarily because people are holding on to their
vehicles much longer than they would have years ago. Cars are much
more dependable nowadays, but they're also more expensive. Combine
strong depreciation factors (a new car's price drops by thousands
of dollars the moment you drive it off the lot), and consumers have
figured out that the fiscally smart thing to do is to keep their
Also, consider some recent survey findings by the Pew Research
Center, which found 38 percent of U.S. adults are "not too" or "not
at all" confident that they will have a sufficiently-sized
financial nest egg upon their retirement. Forty-nine percent of
those ages 35-44 said they had "little or no" confidence that they
will have enough money for retirement, more than double the 20
percent share in that age group who said so in 2009. These are not
fluke statistics and we certainly feel this trend adds to the idea
consumers will continue to deleverage their balance sheets. There
is a price to pay as individuals wise up to how they should be
handling money (saving, staying out of debt, investing).
Corporations will continue the process of streamlining cuts, as we
have been reading from the latest round of quarterly reports.
Sooner or later these cuts trickle down to corporate balance
sheets in the form of lower revenues/profits (less high quality
jobs means less money for people to spend), and depending on
valuations, lower share prices. Wall Street tends to first cheer
companies streamlining costs through headcount reductions, but
eventually the end game is growing revenue. Those who can't right
the ship or at least stop the hemorrhaging will not be attractive
for investors to pour their money into.
Hence, our mission at Dividend.com to avoid these potential
dangers ahead of us. We'll be sure to continually point out these
issues to subscribers and keep our investment ideas as current as
An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our
Best Dividend Stocks List
are the names we currently like for new investor capital,
regardless of what date the stock was first recommended on. If and
when a stock is removed from the list, we will clearly state
whether the stock should be sold (which is rare but occasionally
will happen), or simply held in one's account until we see a better
entry point or catalyst.
And here's one last thing to remember about what we do here at
Dividend.com: it's not just the names that we recommend that can
help you build wealth, but also the things we try to steer you away
from that are just as important. Forget about speculative or penny
stocks, chasing unprofitable IPOs, and listening to the manic
talking heads in the business media!
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Just check our enhanced
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Thanks for reading everybody. I'll see you tomorrow!
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here