Main U.S. indexes all up >1%: Nasdaq out front, up ~1.5%
Cons disc leads S&P sector gainers; healthcare lags
Euro STOXX 600 index up ~0.7%
Dollar gains; bitcoin rallies >4%; gold ~flat; crude declines
U.S. 10-Year Treasury yield edges up to ~4.62%
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DIVIDEND GROWTH STRATEGY MAY HELP COMBAT VOLATILITY - BMO
Since scoring its record highs late last year, the S&P 500 index .SPX has been struggling to shake off its December weakness. If fact, prior to this week, the benchmark index posted losses in four of the five past weeks.
"It seems like the 'good news is bad news' narrative has taken over again since a series of stronger-than-expected economic data points has put a damper on aggressive market expectations for multiple Fed rate cuts this year and has resulted in a sharp increase in bond yields." writes BMO Capital Markets chief equity strategist, Brian Belski, in a note out on Wednesday.
He adds "This has obviously raised the anxiety quotient among investors, particularly considering valuation levels. Nonetheless, we remain confident in our bullish outlook for 2025 and have not seen any material changes in the fundamental backdrop of US equities yet to suggest there is significant trouble on the horizon."
Nevertheless, given current market dynamics, in Belski's view, price swings and bouts of volatility will become more frequent in the coming months.
As such, BMO believes a dividend growth strategy is one way to potentially navigate current and anticipated conditions.
"Our work shows that a strategy focused on dividend growth stocks has outperformed in a variety of market environments and can benefit those investors looking to protect portfolios, as well as those investors looking to bolster performance.
BMO's dividend growth methodology involves screening S&P 500 stocks at month-end for the following factors:
* No dividend cuts in the past five years
* Latest one-year dividend per share growth greater than the S&P 500
* Current dividend yield > than the S&P 500
* Free cash flow yield greater than the dividend yield
* Dividend payout ratio < than the S&P 500
Among the current list of stocks passing the screen, and as of Wednesday were rated "outperform" by BMO, include: CF Industries CF.N, CSX Corp CSX.O, Cincinnati Financial CINF.O, Domino's Pizza DPZ.O., Hess Corp HES.N, Marathon Petroleum MPC.N, and Everest Group EG.N.
(Terence Gabriel)
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FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:
AS TRUMP NEARS INAUGURATION, WHAT TO WATCH FOR ON DAY ONE - CLICK HERE
FTSE RUSSELL CHANGES RECONSTITUTION TO SEMI-ANNUAL EVENT - CLICK HERE
PAIR OF ACES: HOUSING STARTS, INDUSTRIAL OUTPUT BEAT THE HOUSE - CLICK HERE
U.S. STOCKS STRIVE FOR STRONG WEEKLY GAINS - CLICK HERE
INDIVIDUAL INVESTOR BULLS FLEE AS BEARS MAKE THEMSELVES KNOWN - AAII - CLICK HERE
GRANOLAS OR MAG-7? GS SAYS ONE HAS MORE CRUNCH RIGHT NOW - CLICK HERE
MORE OF THE SAME FOR FRANCE THIS YEAR, SAY BOFA - CLICK HERE
SHARES RISING, FTSE 100 AT RECORD - CLICK HERE
EUROPE BEFORE THE BELL: BAD NEWS IS GOOD NEWS FOR THE FTSE - CLICK HERE
MORNING BID: CAUTIOUS END TO WEEK AS TRUMP INAUGURATION LOOMS - CLICK HERE
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