Wall Street Daily

Someday, This War is Gonna End

At the end of one of the most famous scenes from Apocalypse Now, Lieutenant Colonel Bill Kilgore lamented, “Someday, this war is gonna end.”

The Vietnam War had consumed him. It gave him purpose, and he couldn’t imagine life without it.

Well, central bankers are currently at war, too – with the markets – and they can’t imagine life without stimulus.

On October 16, with the S&P 500 down nearly 10% from its peak on September 18, a Bloomberg headline crossed the newswires…

*BULLARD SAYS FED SHOULD CONSIDER DELAY IN ENDING QE*

St. Louis Federal Reserve Bank President James Bullard was doing his part to arrest the rise in fear.

You see, every time inflation expectations have meaningfully declined over the past few years, central bankers have stepped in to provide stimulus in the form of quantitative easing (QE).

But now, it seems as though central planners can’t even tolerate a garden variety stock market correction before hinting at even more stimulus.

And it’s important to realize that, right now, the global financial markets are being driven by artificial stimulus, not fundamentals.

Matt King, Global Head of Credit Strategy at Citigroup, estimates that it takes around $200 billion from central banks each quarter to keep markets from selling off.

Alas, these are the financial markets we have, not the ones we may desire. We can only follow our investing processes as central planners continue to wage war against the free markets, price discovery, and the efficient allocation of resources and capital.

I can just imagine the Fed governors telling their young researchers in the halls of the Eccles Building…

“Someday, this war is gonna end.”

Portfolio Update

Those who went shopping for dividend growers amid the margin calls, as I suggested last week, have been rewarded handsomely. Those who sold into the fear are now chasing stocks higher.

The Dividend Sonar Index (DSI) is still down around 1.9% for the quarter, but considering its energy sector and mid-cap exposure, it held up admirably during the selloff.

Click here for the full portfolio…

Dividend Actions

Dividend Payout Increases

Ticker Name Market Cap (Billions) Dividend Declaration Date Previous Dividend Latest Dividend Dividend Payout Change Dividend Yield
UFPI Universal Forest Products Inc $1.0 10/15/2014 $0.21 $0.4 90% 1.6%
UCBI United Community Banks Inc/GA $1.0 10/16/2014 $0.03 $0.05 67% 1.3%
VFC VF Corp $27.6 10/16/2014 $0.2625 $0.32 22% 2.0%
HBAN Huntington Bancshares Inc/OH $7.5 10/17/2014 $0.05 $0.06 20% 2.6%
WNR Western Refining Inc $4.3 10/14/2014 $0.26 $0.3 15% 2.8%
EV Eaton Vance Corp $4.3 10/16/2014 $0.22 $0.25 14% 2.8%
GS Goldman Sachs Group Inc/The $81.0 10/16/2014 $0.55 $0.6 9% 1.3%
B Barnes Group Inc $1.8 10/17/2014 $0.11 $0.12 9% 1.5%
MLAB Mesa Laboratories Inc $0.2 10/14/2014 $0.15 $0.16 7% 0.9%
PAG Penske Automotive Group Inc $3.6 10/15/2014 $0.2 $0.21 5% 2.1%
SHLM A Schulman Inc $0.9 10/16/2014 $0.2 $0.205 2% 2.6%
HCSG Healthcare Services Group Inc $1.9 10/14/2014 $0.17375 $0.175 1% 2.5%

 

Dividend Initiations

Ticker Name Market Cap (Billions) Dividend Declaration Date Dividend Dividend Yield
METR Metro Bancorp Inc $0.3 10/14/2014 $0.07 1.3%
WGO Winnebago Industries Inc $0.6 10/15/2014 $0.09 1.8%
VAC Marriott Vacations Worldwide C $2.1 10/16/2014 $0.25 1.5%

 

Dividend Action Watch

Ticker Name Tentative Dividend Declaration Date
WCN Waste Connections Inc 10/21/2014
MSM MSC Industrial Direct Co Inc 10/22/2014
PNW Pinnacle West Capital Corp 10/23/2014
RKT Rock-Tenn Co 10/24/2014
MAC The Macerich Co 10/24/2014
V Visa Inc 10/24/2014

 

Source: Wall Street Daily, Bloomberg