What we’re reading (11/20)
“Dividends Are Down, But They Are Vastly Better Than Expected” (New York Times). “There were predictions by Goldman Sachs, among others, that dividends would fall by more than 20 percent, cutting payouts to investors by hundreds of millions of dollars. Well, it hasn’t turned out that way. Dividends are down, yes, after years of steady and substantial gains. But with little more than a month to go in 2020, the total decline for dividends in the benchmark S&P 500 stock index is likely to have amounted to less than 1 percent — 0.67 percent, more precisely.”
“Mnuchin Decision Cuts Fed Lending Power, But Sources Say Emergency Programs Can Be Revived” (CNBC). “Treasury Secretary Steve Mnuchin’s decision to allow several of the Fed’s emergency lending programs to expire on Dec. 31 will dramatically reduce the central bank’s ability to backstop the financial system….Mnuchin announced Thursday he will not extend the Fed’s programs that used Congress’ CARES Act funds. Created in response to the financial panic that accompanied the lockdowns in the spring, those programs gave the Fed the ability to lend up to $4.5 trillion into various financial markets. Mnuchin argued it was the intent of Congress for the funds to expire.”
“Goldman Sachs Says Commodities Poised For Bull Market” (Reuters). “Goldman Sachs on Wednesday maintained its ‘overweight’ recommendations for commodities in 2021, reasoning the sector was possibly the best hedge against likely inflation and poised for another bull market. The bank forecast a return of about 27% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 19.2% return for precious metals, 40.1% for energy, 3% for industrial metals and a negative 1% return on agriculture.”
“If You Think Only E-Retailers Use Your Data, Think Again” (Real Clear Markets). “Major retailers and grocers all use data to determine which products to carry when, which generics to sell, and how to sell more or particular items. Aldi partners with Nielsen to gather customer data, while Kroger partners with Microsoft. Walmart was the third largest spender on information technology in the United States in 2018, and Amazon provides data to their sellers. All of this data provided to these companies is used for growth, to determine trends and shifting needs of a customer base.”
“Lumber Prices Rise Again, Defying the Normal Seasonal Slowdown” (Wall Street Journal). “Lumber prices are making an unusual late-season climb, thanks to builder-friendly autumn weather and suppliers stocking up for what they expect to be another big year for home construction. Lumber futures have shot up 24% so far in November, closing Thursday at $616.90 per thousand board feet. That’s a lot lower than the record $1,000 hit this summer during America’s pandemic-induced lumber binge. But it is nearly 90% more than the typical price for boards delivered in January.”
