Watching the Banks

[Bullitt]

Reality is starting to set in for the banks in a zero interest rate policy environment. The more the banks drop, the more likely dividend cuts are to occur, but if buybacks are suspended, free cash could keep dividends from disappearing.

Wells Fargo (WFC), one of the largest U.S. banks, has acknowledged that it will be a casualty. It announced late last month that its third-quarter dividend will need to be reduced, from its current 51 cents a share.

Research firm IHS Markit is projecting that the bank’s payout will be slashed by 60%, to 20 cents a share.

One tail wind for dividends is that many companies—large banks in particular— have cut back on share repurchases. Instead of directing cash to what had become a popular way to return capital to shareholders in recent decades, companies might now have spare cash for dividends.

Last year, Nijenhuis says, S&P 500 members spent roughly $800 billion on buybacks. He expects that figure to be halved this year. “That does make paying a dividend much easier,” he observes.

https://www.barrons.com/articles/div...ut-51594306801

[Bullitt]

Sitting on moving average and trendline support. Need the "value stocks" to join in if the market isn't going to collapse. What's it going to be?

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[Bullitt]

While Robinhooders watch TSLA, NKLA, AAPL, the banks put in a higher low.

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[Bullitt]

XLF now above June highs.

[Bullitt]

Second weekly close above June highs, leaning bullish towards a recovery.

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[nasa1974]

That large gap is a little scary.