Dividends grow, stocks meander in boring Tuesday trading

Dividends grow, stocks meander in boring Tuesday trading

Home Depot [HD] posts nice numbers, oil, gold back to their losing ways, and new Square [SQ] IPO looms later this week. Boredom reigns supreme in light trading.

Vintage postcard showing Meander Lake/Reservoir, visible off the Ohio Turnpike near Niles, Ohio. Apparently, this man-made Reservoir gets its name due to its meandering shape, which makes it a good analogy for today's Wall Street trading action. (Uncopyrighted postcard image)

WASHINGTON, November 17, 2015 – Boring trading is dominating Tuesday’s jaded markets. Home Depot’s (symbol: HD) numbers jazzed traders at the opening bell, although the halo effect is diminishing as we write this around 2 p.m. EST. The Dow is up approximately 83 points with other averages showing similar approximately 0.5 percent gains. But markets don’t seem much inclined to rally big again today, meaning that much of Monday’s irrationally exuberant trading was probably another oversold bounce/short squeeze.

Balancing out vestiges of optimism today is the simple fact that commodities—particularly oil and gold—are taking it in the ear again today after briefly rallying on Middle East fears prompted by those brave Islamofascists who slaughtered scores of innocent Parisian citizens last Friday.

With bombs now raining down on ISIS (instead of NATO boots on the ground which would really get the job done), markets seem to be defaulting to complacency. Momentary fears of oil shortages and the usual “political instability” bid gold gets in times like these, seem to have vanished in less than a fortnight. Gold is taking a bigger beating than oil right now, but that could change at any time.

On the plus side of the ledger, CNBC tells us that dividends are up big time this year, good news for income-oriented investors. The problem here, though, is Newtonian Physics as applied to the stock market. While those dividend rates are melting up, the price of the underlying stocks is melting down, as investors seem to be seeking more volatility rather than predictable income. The drop in dividend paying stocks like utilities is often guilty of erasing in capital value what you’re getting back in income, meaning you’re account is left flat on these issues at the end of the day. Frustrating. But then again, we could be trading in Shanghai.

Essentially, what we have here is a seriously meandering market. Directionless, lacking conviction, markets continue to wring their hands over the usual topic—interest rates and what the Fed will do with them—and the overall Carter-like malaise that’s overcoming markets which, at long last, realize they haven’t had a President on their side for approaching 8 years, a situation that won’t change anytime soon.

For this reason, we’ll take an afternoon snooze after we sign off here, rather than continuing to wrestle with the nonsense and treachery of thinly traded markets.

Stock-wise, we have put in for shares of “Square,” (proposed symbol: SQ), the company that sells those little square thingies you hook onto an equipped iPhone or other such device, enabling it to swipe customer credit cards at point of sale locations.

We’re not sure if this IPO will be a winner in the current highly suspicious trading environment. Plus, you have to figure that these little guys are actually up against monster players like Apple (AAPL) in this competitive space, which makes you wonder if they’re going to be viable, say, beyond the semi-mandatory 30-day holding period our broker “encourages” us to hold new IPO shares.

As usual, we’ll see how the issue prices before we actually make our final decision. Pricing will occur sometime after COB, November 18, 2015. Coincidentally, that’s when dominoes start falling for the CSC corporate split/big dividend bonanza that will come to full fruition later this month. (See our lengthy explanation as to how this will work in our companion column.)

Anyhow, we’ll let you know what our final decision is/was in Thursday’s column. If you’re excited about this issue, you’ll need to contact your broker. As with us, you might find in the end that you don’t get any shares because the rich dudes got to buy them all first. Then again, if the IPO tanks, you might be glad you were shunned anyway.

That’s about it for today. Nothing much happening means nothing much to write.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17