We had a nice little rebound this morning before that momentum faded midday. The herky-jerky action is all the more reason for investors to hold tight until April. But in the meantime, I wanted to touch base and let you know what I’m watching today. Much of it is very encouraging.
It was nice to see bargain-hunting get underway, particularly in dividend stocks. It looks like the quarter-end window-dressing I’ve been talking about is beginning. That’s been really helpful for my Platinum Growth Club Model Portfolio and the other stocks I recommend. Here in Market360 tomorrow we’ll discuss what to look for in a dividend stock, because this group is going to be key “movers and shakers” going forward.
After all, the 10-year Treasury yield has gone dramatically lower, including during this morning’s stock market rally. I can’t tell you how positive that is. When yields were going higher while the market was going down, that was upsetting a lot of people, raising a lot of concerns. But the Federal Reserve has been injecting a lot of quantitative easing money, and this aggressive central bank action is shoving our yields down. So, that’s good. People need yield, and the less that’s available in the bond market, the more popular dividend stocks will become.
Now, there have been some dividend cuts in companies with the most exposure to the current crisis in the global economy. The big news was Ford (F) cut its dividend; it was yielding 13%, but they eliminated the dividend because of plant closures and things like that.
And Ford plants are not the only ones closed during the worldwide quarantine. So, the question for dividend-paying companies and everyone else is: When will they reopen?
When factories come back online, it’s going to be a big deal, folks. I’m sure everybody’s eager to get back to normal, and we’ll have a nice rally.
Hopefully that’ll be sometime in early April. But we can’t be premature. After all, what’s going on in Italy all started with the textile industry. That’s big business in Northern Italy, and they have textile mills in Wuhan, China, with direct flights between there and Milan, so that’s why it exploded there. It’s very, very tragic. But once Italy and Spain get better, there’s hope for the rest of us to get better, too.
But for now, the United States is being very, very aggressive on stay-at-home orders in certain states and metropolitan areas. Hopefully we’ll be able to lift them in three weeks or so.
I’m expecting wild economic data to come out for March, though. Retail sales are going to be down 10% or more this month; I’m sure unemployment is going to spike short-term to 8% or more. But pretty much everyone in America wants to get back to work, and the FDA is expediting tests on all these drugs.
In America, we have a lot to be thankful for right now. So hang in there; let’s hope the bargain hunting continues next week. It’s nice to be giving you some good news for a change. I still think the best time to get in is going to be early April, but I’ll keep you posted on that going forward.
Note: Bear market or no, I run a complete scan of the stock market every Saturday (to get a full week’s worth of data). Money always has to go somewhere on Wall Street – and that creates opportunity for growth investors.
I’ll be fine-tuning my Platinum Growth Club Model Portfolio accordingly. Besides strong dividend payers, I want to own companies that can maintain strong fundamentals in general, going forward.
So, if you try us out now, you’ll get that hand-picked list, plus invites to my VIP Chats, for which you can submit your questions directly to me. (But, in these volatile conditions, I’ve also been recording podcasts every day for subscribers to Platinum Growth Club and ALL my services.)