Dividends are on the chopping block.
The Wall Street Journal reports that a record number of companies have suspended or canceled their dividends in 2020. In fact, more companies have discontinued their dividends this year than in the last 10 years combined.
Here’s a list of big companies that have stopped paying dividends:
- Delta Air Lines
- General Motors
Plus, over 135 companies have reduced their dividend payments.
The total dividend reductions total $22.8 billion.
Bank of America is predicting an overall 10% decline for dividend payments in 2020.
Typically, stocks that cut their dividends see their share prices drop. However, that hasn’t been the case recently. Investors have accepted dividend cuts as a necessary step to survive the downturn.
The dividend cuts are a sign that the coronavirus outbreak is weighing on companies around the world.
Corporate earnings season is in full swing. And we’re expecting reports from Apple, Amazon, Microsoft and Boeing. We’ll be watching the results and keeping you updated on the fallout from this pandemic.
The Big News…
Oil Falls Again
Oil prices are falling once again. The June crude oil contracts fell nearly 20% before rebounding to over $12. During intra-day trading, West Texas Intermediate Crude (WTI) fell to its lowest level since 1986. It’s possible that June contracts will go negative – a repeat of the unusual situation in May.
Unemployment Pays More Than Work
Approximately 50% of American workers are earning more on unemployment than their previous job. The stimulus laws added $600 per week to unemployment benefits. And that means the average payout works out to nearly $1,000 per week. The larger benefits continue through July 31 and may encourage workers to hold off on returning to work.
Argentina Bans Flights Until Sept. 1
Argentina has extended its nationwide ban on commercial flights. The extension continues until Sept. 1. The move could result in 300,000 jobs lost.
New $1 Trillion Stimulus
Republicans on Capitol Hill are starting work on another stimulus bill. This one is expected to top $1 trillion and include huge spending on infrastructure projects including 5G. Go here for the top All American 5G stocks to BUY NOW.
The Coronavirus Numbers
Here are the numbers from Tuesday at 10 a.m. ET.
- 3,086-832 Infected worldwide
- 212,665 Deaths
- 1,012,147 Infected in the U.S.
- 56,933 Deaths in the U.S.
The outbreak will crush U.S. corporations and their earnings. Reports are coming in every day.
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Investor optimism is soaring, too – despite poor earnings, a weak outlook and massive uncertainty.
3M shares were up after the company beat sales and EPS estimates. And PepsiCo stock was gaining nearly 2% despite EPS falling short of expectations.
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Yours in Health & Wealth,