| Monday, August 24, 2020 Headlines 1. Markets rally to new records to start week 2. Apple surges ahead of stock split 3. TikTok sues US govt. challenging Trump order 5. Dividends have diminished 6. Economists fear a double-dip Markets Closed
 Image courtesy GettyImages/saiko3p
Markets Today Global markets climbed into the week with a surge of optimism as European indexes notched strong gains that were followed by the U.S. The DJIA and the S&P 500 posted their best day since June 12, as shares of Apple (AAPL) continued to rise ahead of its planned stock split. Stocks tied to an economic recovery also surged, with hotels, airlines, and cruise companies posting their best day in weeks. The S&P 500 and the Nasdaq both closed at record highs, again.
Gold futures fell on Monday, under pressure from a rise in the U.S. stock market and signs of strength in the dollar that drove prices for the metal to their lowest settlement since late July.
Stock investors may have been inspired by the Trump Administration's announcement Sunday that it would grant emergency authorization of convalescent plasma to treat hospitalized COVID-19 patients. Or, they have a feeling that record highs for the major indexes are a sign of investor optimism, and the trend is their friend.
Economists, on the other hand, are much less confident about the economic outlook, with many predicting a double-dip recession, or worse. The divergence between those two camps is as wide as ever, and so is the separation between the haves and the have nots as it relates to stock ownership.
According to data from the Federal Reserve, ownership of the equity markets has been further concentrated into the hands of the wealthy over the past decade. They've benefited the most in this recovery.  [NEW READER SURVEY: We are running another two-week survey of our U.S.-based readers to gauge your sentiment and see what moves, if any, you have been making with your money given the market recovery and current economic conditions. We'll share the results, as always, and we thank you for your time and participation.]
Headlines:
 Dividend Plunge The second quarter witnessed the steepest plunge in dividend payouts since records have been kept, according to Janus Henderson. Total payouts fell by $108.1 billion to $382.2 billion, the lowest second-quarter total since 2012. According to Janus, the 19.3% plunge was easily the worst quarterly drop since the index started at the end of 2009. 27% of dividend paying companies cut their payouts, and more than half of that group cancelled them outright.
It wasn't just a U.S. phenomenon, either. Dividends fell in every region of the world, except in North America, thanks in particular to resilience among Canadian companies. The worst affected regions were Europe and the U.K., where payouts fell by two-fifths on an underlying basis. France, Europe's largest dividend payer, saw total dividends reach their lowest level in at least a decade.
At the other end of the European scale, Swiss payouts barely changed year-on-year. In Asia, Australia saw the greatest impact given its concentration of mining companies that traditionally pay dividends, with more expected to come in the third and fourth quarters, while Japan was relatively insulated.  Chart courtesy NABE
Economists Fear the Double-Dip Nearly two-thirds of economists surveyed by the National Association for Business Economics believe the U.S. economy continues to be in a recession that began last February, and almost half the respondents expects inflation-adjusted gross domestic product to remain below its fourth-quarter 2019 level until the second half of 2022 or later. 80% of those economists indicated that there is at least a one-in-four chance of a double-dip recession.
High levels of unemployment and a possible resurgence in the virus remain their key areas of concern, of course.
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(chart courtesy YCHARTS)  Airlines, such as American, United, and Delta, are up today following several positive developments in the fight against the coronavirus. Cruise stocks, including Carnival and Norwegian, are also up on the news.  Centene fell the furthest today—by over 3.5%. Several healthcare stocks, including Humana, Hologic, and Thermo Fisher Scientific, also closed lower. Word of the Day Dividend Payout RatioThe dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative to the net income of the company. It is the percentage of earnings paid to shareholders in dividends. The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest in core operations. It is sometimes simply referred to as the "payout ratio."  Photo credit Arty Pomerantz/New York Post
Today in History Aug. 24, 1967: In what they called an act of "guerrilla theater," Abbie Hoffman and a dozen other Yippies crashed the visitors' gallery of the New York Stock Exchange and showered the trading floor with dollar bills. "[The stock traders] don't know what money is," explained one Yippie. "They deal in stock certificates." The Yippies have a point: Trading slows to a crawl as brokers and clerks scurry to grab the money as it falls.
John Kifner, "Hippies Shower $1 Bills on Stock Exchange Floor," The New York Times, Aug. 25, 1967.
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Monday, August 24, 2020
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