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Stock Market This Week
Stock Market This Week – 01/07/23
The stock market started the week and year positively despite hawkish comments from the U.S. Federal Reserve. In addition, wages and inflation are moderating, causing investors to reenter the market.
Nine of the eleven sectors posted gains for the week. As shown by data from Stock Rover*, all the major indices were positive, with the Russell 2000 performing the best while the tech-heavy Nasdaq performed the worst.
The Communications Sector led the way with a strong rebound from Verizon (VZ). Financial Services, Basic Materials, Consumer Cyclical, and Industrials all had positive weeks. However, Utilities and Healthcare were down for the week.
For the trailing 1-year year, the Dow 30 is doing the best, and the S&P 500 Index is still in a correction, while the Nasdaq is still in a bear market. The Energy and Utility Sectors are the only positive ones.
The dividend growth investing strategy has performed relatively well, outperforming the S&P 500 Index and Nasdaq for the week. The table below shows their performance by category. All categories are now in positive territory.
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Dividend Increases and Reinstatements
Search for a stock in the list of dividend increases and reinstatements. This list is updated weekly. In addition, you can search for your stocks by company name, ticker, and date.
Dividend Cuts and Suspensions List
The dividend cuts and suspensions list was most recently updated at the end of November 2022. As a result, the number of companies on the list has risen to 602. Thus, well over 10% of companies that pay dividends have cut or suspended them since the start of the COVID-19 pandemic. The list is updated monthly.
Thirteen new additions indicate companies are starting to experience headwinds in December 2022.
Stock Market Valuation This Week
The S&P 500 Index is trading at a price-to-earnings ratio of 20.26X, and the Schiller P/E Ratio is about 28.48X. These multiples are based on trailing twelve months (TTM) earnings.
The long-term means of these two ratios are approximately 16X and 17X, respectively.
The market is still overvalued despite the recent correction and a bear market and rebound. Earnings multiples of more than 30X are overvalued based on historical data.
Stock Market Volatility This Week – CBOE VIX
This past week, the CBOE VIX measuring volatility ended at 21.13. The long-term average is approximately 19 to 20. The CBOE VIX measures the stock market’s expectation of volatility based on S&P 500 Index options. It is commonly referred to as the fear index.
Economic News This Week
Provided by Stock Rover*.
The ISM® (Institute for Supply Management®) Manufacturing PMI® reported 48.4% for December as business activity fell 0.6 points from the previous month. This marks the first contraction after 30 consecutive months of expansion. A value below 50% is indicative of a shrinking economy. “The past relationship between the Manufacturing PMI® and the overall economy indicates that the Manufacturing PMI® for December 48.4% corresponds to a 0.1% decrease in the real gross domestic product (GDP) on an annualized basis,” said Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee. The Manufacturing PMI® figure is now at its lowest level since May 2020, when it registered 43.5%. Of the six biggest manufacturing industries, only Petroleum & Coal Products showed moderate growth. The index for new orders contracted for the fourth month, reaching its lowest level since the pandemic, declining 2.0 points to 45.2%. The prices index, which measures what companies pay for raw materials and other supplies, fell 3.6 points to 39.4%. This is the lowest reading since April 2020. Over the past nine months, the index has decreased by 47.7 points. The Employment Index returned to expansion territory, up 3 points to 51.4% after contracting in November.
The Commerce Department reported that the U.S. trade deficit shrank 21% in November to $61.5 billion, the lowest deficit since September 2020. The percentage decline was the largest seen since February 2009. A shift in consumer spending from services to goods contributed to the contraction as imports dropped 6.4% to $313.4 billion. Imports for pharmaceutical preparations, cell phones, household goods, and automotive all saw decreases. Exports fell 2.0% to $251.9 billion, with goods shipments sinking 3.0% to $170.8 billion, as the stronger US dollar has made exports more expensive. A drop in natural gas, crude oil, and civilian aircraft exports was partially offset by an increase in pharmaceutical preparations. Demand for U.S. exports has weakened as the trade deficit with China decreased from $5.8 billion to $20.4 billion in November, and the European Union dropped $3.6 billion to $19.5 billion. Year-to-date goods imports from the European Union ($662.6 billion) have exceeded China’s ($499.4 billion).
The U.S. Bureau of Labor Statistics reported 223,000 jobs were added as the unemployment rate fell to 3.5% in December. November’s reading was revised (-7,000) to 263,000 as the unemployment rate was also adjusted to 3.6% from 3.7%. The number of unemployed workers edged lower to 5.7 million from the previous month’s 6 million. Some 4.5 million new jobs were added in 2022, an average of (+375K) per month. Leisure and hospitality (+67K) led the way in job gains, but it is still some 932K short of pre-pandemic levels. Job gains were also reported in healthcare (+55K), construction (+28K), social assistance (+20K), retail trade (+9K), and manufacturing (+8K). There were 10.46 million job openings in November – about 1.7 for each person looking for a job. The labor force participation rate increased slightly to 62.3% from 62.1%, leaving it below the pre-pandemic level of 63.4%. Average hourly earnings increased by 0.3% in December. At $32.82, average hourly earnings are up 4.6% from a year ago.
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Here are my recommendations:
If you are unsure how to invest in dividend stocks or are just getting started with dividend investing. Please look at our Review of the Simply Investing Report and Course. I also provide a review of the Simply Investing Course. Note that I am an affiliate of Simply Investing.
If you are interested in an excellent resource for DIY dividend growth investors. I suggest reading our Review of The Sure Dividend Newsletter. Note that I am an affiliate of Sure Dividend.
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.
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