Together, the two news breaks fueled a jump in stock futures an hour prior to the opening bell. The
The remdesivir announcement came from the familiar face of Dr. Anthony Fauci, who now says he let the news out somewhat early because he was concerned about the possibility of the news leaking out from elsewhere.
Rubbish. Fauci is deeply entrenched within the government COVID-19 team. His very own "leak" was timed to front-run the damaging news of contraction in first quarter GDP. He, along with tag-team partner, Dr. Deborah Birks, and Treasury Secretary Steven Mnuchin, are all in on the big con, keeping the pandemic narrative alive and well, avoiding any kind of actual progress that could be made, obfuscating useful information, offering bad advice, and generally keeping the public as much in the dark as possible with a huge assist from mainstream media, which now reports almost exclusively on coronavirus-related stories all the time, every-day, ad nauseum.
There's little doubt that the orchestrated, concerted effort to extend lockdowns, provide conflicting and misleading information, scare people into irrationality, and keep the United States in a crippled condition is a White House operation. President Trump and Vice President Pence have to know what's what, and they are either complicit or playing a long game that should result - if they're just playing along for now - in revelations (and hopefully, charges) this summer of corruption at the CDC and elsewhere in the government.
While there's little clear-cut evidence to suggest that the president isn't in on the entire scam, he remains somewhat solid amongst his base of supporters, but there are troubling signs that he's not been completely honest throughout the crisis. In case the crisis persists through the summer, Trump is going to have a difficult time winning re-election, even though his opponent, Joe Biden, is a very weak choice for the Democrats.
Getting back to the timing of the Wednesday morning announcements, the GDP release was almost immediately corrected, from a positive 4.8% to negative 4.8%, though there's no mention of the fake +4.8% announcement which was banged out first in order to trick the algorithms, and it worked, but overall, the remdesivir story overshadowed the dire GDP numbers and the FOMC policy announcement and press conference later in the day. The effective result was good for more than a two-percent gain in the Dow, S&P and NYSE Composite and a 3.57% rise on the NAASDAQ.
As far as remdesivir being a panacea for controlling, containing, and/or defeating coronavirus, the indefatigable (and reliably honest) Chris Martenson explains:
Thus, in a nutshell, fake news triumphs over reality, and stocks soar as the US economy is now firmly into a recession, along with many other countries, including Spain, France, South Korea, Indonesia. One might be persuaded into admitting that the Global Depression has begun in earnest and that somehow encourages investors to buy more stocks.
As the stock market gains are a matter of record, the sad reality is that share prices didn't go up on buys by the likes of Goldman Sachs or JP Morgan or any of the big banks' trading units. The purchases on Wednesday will most assuredly be credited into the accounts of weakened pension funds, which will take more severe losses in the next round of selling.
The game is rigged completely against the public.
On the dividend front, from where this blog hastily retreated Wednesday morning, the overnight news that Royal Dutch Shell slashed its dividend for the first time since World War II, supplies more evidence of the depth of this downturn.
"Investors risk putting money into the markets in order to stand a chance of achieving a better return than cash in the bank. While rates on cash savings accounts have been drifting down for a while, investment dividends were widely considered to be much more reliable.
"Sadly that is no longer the case, given how more than 300 companies on the UK stock market have this year said they won't be paying dividends for the time being or paying a much lower level than before. This figure includes 41 companies in the FTSE 100."
-- Ross Mould, investment director at AJ Bell
Alongside the British companies, stand the 81 (as of Monday morning... there are more now) US companies which either reduced their dividend or eliminating it altogether.
Taking a quick look at the Dow components, we see that Boeing (BA) has already suspended its dividend earlier this year, which was a whopping $8.22 a share. The stock has fluctuated wildly since, but has collapsed from a 52-week high of 391.00, to close yesterday at 139.00. When a stock loses 64% of its share price, eliminates its dividend, lays off workers, and faces numerous lawsuits, that stock should be trading in single digits. It's almost worthless or could actually be tallied in the liability column. The outlook for Boeing is grim, though Wall Street investors have seen fit to boost it recently from 89 to its current price, which is likely to be hammered in the next downturn. Boeing is not a buy or even a hold. The time to sell this dog was months ago.
A few other candidates for dividend cuts or suspension include the obvious, ExxonMobil (XOM), which has missed three of its last four earnings estimates and reports for the first quarter on May 1 (Friday). The current dividend is $3.48, offering a yield of 7.33%. With the price of oil having cratered over the past two months, this company is likely to miss its earning targets again and the likelihood of cutting the dividend is very high.
On Wednesday, Chevron (CVX) announced a dividend of $1.29 a share to investors of record through May 19, payable June 20. whether this will be the last of the 5.45% yielding dividend remains to be seen. While it may be enticing to hold CVX through its first quarter earnings report (May 1) until the ex-dividend date, a drop in the price of the stock of less than 1.5% (about 1 1/2 points) would render that gamble a moot point. And, if the company announces a dividend cut and the stock goes down more, it turns into a major loss.
Among the companies on the Dow that have already reported first quarter earnings is Johnson & Johnson (JNJ). The company raised its quarterly dividend to $1.01 per share from 95 cents per share, as it announced earnings on Monday. Comparatively, this company looks rock-solid.
Merck (MRK) and Pfizer (PFE) each reported earnings on Tuesday of this week. Merck beat big, posting 1.50 per share against estimates of 1.34, keeping its annual dividend of 2.44 intact (3.02% yield), but cutting guidance.
Pfizer (PFE) also beat, retaining its annual dividend of 1.52 (3.99% yield). The company may be one to produce or share in the creation of some COVID-19 treatments or vaccines, though those potentialities go with an undue level of risk.
Intel (INTC) recently reported first quarter earnings at 1.45 per share over estimates for 1.28. The tech firm sports a dividend of 1.32 (2.25% yield) and is probably a safe bet to keep paying that out. However, here's where the math becomes important. If Intel tanks again - it fell to 42.86 in March from a high of 69.29, the paltry sum garnered from the dividend will be little consolation with the stock down 30 percent or more.
One of the worst plays of dividend-bearing Dow stocks going forward could be Apple (AAPL). The darling of Wall Street and the Swiss National Bank (a major shareholder), Apple's 3.08 annual dividend yields just 1.07%. with the stock trading with a multiple of 20-24 recently, even a minor downturn wipes out any gain from the dividend. Apple is unlikely to cut the dividend, as it is flush with cash. This one could go either way.
That's a snapshot look at a number of Dow stocks. We'll be examining more of them on Friday morning and over the weekend in the WEEKEND WRAP.
Just in, the U.S. Labor Department released its weekly jobless claims figures Thursday morning, and another 3.839 million Americans filed for unemployment benefits during the week ending April 25. That boosts the number of jobless in America to 30 million, unofficially putting the unemployment rate at 20%, the highest since the Great Depression.
This time, it appears that Wall Street won't be celebrating. Futures have been eroding all morning, with Dow futures off nearly one percent with the opening bell less than an hour away.
At the Close, Wednesday, April 29, 2020:
Dow: 24,633.86, +532.31 (+2.21%)
NASDAQ: 8,914.71, +306.98 (+3.57%)
S&P 500: 2,939.51, +76.12 (+2.66%)
NYSE: 11,618.23, +298.54 (+2.64%)
Posts
No comments:
Post a Comment