Eq: Large Cap

(New York)

The market has hit a rough patch the last couple of days, falling almost 1% yesterday. Investors have once again grown anxious about slowing growth and trade tensions between the US and Mexico. Despite this renewed anxiety, Bank of America Merrill Lynch is encouraging investors to buy the dip. The bank has frustration about the “stubbornly flat” yield curve, but says that “The correct strategy in 2018 was ‘sell-the-rip’; Positioning, Policy, Profits and Populism argue the correct early 2019 trading strategy is to ‘buy-the-dip”.


FINSUM: The market has bounced back a long way from Xmas eve. In some ways it feels too much too fast, but then again, valuations are more sensible and the Fed has backed off.

(New York)

Dividend stocks have not been looking as appealing lately because of the rise in rates. Yields on even short-term assets now look much more attractive than the near zero coupons that were being offered a few years ago. That said, dividend stocks have a special niche within a portfolio, and it is not hard to find some very solid stocks with good yields. One of the best ways to buy dividend stocks is through an ETF that can select a large and balanced group. With that in mind, here are three ETFs to do just that: ProShares Dividend Aristocrat ETF (NOBL), the SPDR S&P Dividend ETF (SDY), and the Vanguard Dividend Appreciation ETF (VIG).


FINSUM: With the Fed showing dovishness on rates, the outlook for dividend stocks has suddenly brightened.

(New York)

Are you hoping for a return to big company buybacks? For the few years before last year’s big losses, buybacks were a big part of the nice returns seen by the market. A return to such behavior, while questionable on the part of companies, would likely help support share prices. Well, JP Morgan thinks it’ll be another major year for buybacks. Just like last year, companies are expected to announce over $1 tn of buybacks on the back of the benefits from Trump’s tax cuts. Overseas cash is expected to help power the repurchases.


FINSUM: We are not particular fond of the underlying financials of buybacks (at least when companies issue debt to do so), but do think this would be very supportive of share prices this year.

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