The U.S. and China held another round of trade talks in Washington D.C. this week, ahead of the looming March 1 deadline for potential tariff increases. Trading activity was relatively quiet during the holiday-shortened week and the Nasdaq Composite Index ended an eight-session winning streak on Thursday.
Fed on Hold, Q4 GDP on Deck
Investors digested the minutes from the January FOMC meeting on Wednesday and Fed funds futures are now factoring in a 92% probability that the committee will take no action with interest rates in either direction in 2019.
Looking ahead to next week, Fed Chairman Powell will be on Capitol Hill on Feb. 27, delivering his semiannual testimony to the House of Representatives.
On the economic front, traders will also be paying close attention to the initial reading of fourth-quarter U.S. GDP growth on Feb. 28. The report was delayed by the Government shutdown in January, but we’ve already seen with the recent jobs data that the record-long closing did not appear to slow down economic activity in this country.
Retail Earnings Around the Corner
Earnings season is winding down for companies with a traditional December fiscal year end and retail names are starting to dominate the calendar. Many retailers end their fiscal year in January, which offers a chance to calculate net returns from the holiday season and initial gift card spending.
Industry bellwether Wal-Mart (WMT) posted solid results this week, but CVS Health (CVS) fell 8% a day after disappointing the market with its forward guidance.
Looking ahead to next week, the retail sector will again headline the earnings calendar, beginning with Home Depot (HD) and Macy’s (M) on Tuesday.
Earlier this month, Government data showed that U.S. retail sales fell 1.2% in December from the previous year. The jury remains out on how the sector, which continues to be transformed by Amazon.com (AMZN), stands to fare in 2019.
Here’s a list of companies, including a few non-retailers, schedule to post quarterly results next week:
Bigger Isn’t Always Better; Focus on Growth With These 7 Stocks
U.S. stocks have started 2019 have a bang, but Kraft Heinz (KHC) is one dividend payer that disappointed investors this week. The stock lost more than 20%, after management said the company couldn’t sustain its 5% dividend yield and slashed the quarterly payout by 36%.
It’s easy to be tempted by a hefty dividend yield, especially with a lower interest rate outlook from the Fed.
However it’s important for investors to remember that whether stocks are up or down, the market always places a premium on growth.
A stable dividend of 5% or more is nice, but what investors really need to build wealth over time, is a dividend that management continues to raise year in and year out.
It may sound too good to be true, because growth investors and income investors don’t usually see eye to eye.
Income seekers want the security of 5%-plus annual dividend yields, while growth hounds think that cash should be reinvested back into the business– because a solid earnings report can send a stock up that much in one day.
We’re here to tell you it’s possible to have the best of both investing worlds, and my colleague Brett Owens can show you how, with his simple (and safe) way to earn 12% a year from stocks with “hidden yields”.
At that rate, your money will double every six years, plus you can triple the retirement income that most dividend aristocrats or “safe” fixed income investments currently offer.
How do we accomplish this? Brett has discovered a key relationship between dividends and price gains that allow investors to find both growth and income in “hidden yields”.
Companies that consistently grow their dividends over time tend to outperform. The trick is the best dividend stocks almost never show high yields, because stock gains tends to track the size of dividend increases. If a company increases its dividend by 10% and the higher yield brings new buyers in, it often will send the price up and the yield back down toward where it started.
The hard part is finding the right investments to begin with and Brett has created a list of 7 stocks that offer such “hidden yields.”
These companies provide a solid dividend today, with the potential to keep growing that payout over the next several years—regardless of the interest rate agenda of Chairman Powell and the FOMC. It’s easy to fixate on a stock’s dividend history or its current yield, but the real value lies in how much that payout can grow in the future.
What starts out as a 2%, 3% or 4% yield today grows each time a company raises its dividends. You could easily end up earning 10% or even 20% a year just from rising dividends … because your original amount of invested money never changes!