When investors look for dividend stocks, they must assess the sustainability, or "safety" of the yield they're seeking. I know from my Safest Dividend Yields Model Portfolio that companies with strong free cash flow provide higher quality and safer yields because the firm generates enough cash to support the dividend. A high dividend can disappear in an instant if the company paying it doesn't generate enough cash flow.
Gold has been out of luck for the majority of the year so far. The year to date (YTD) performance of the precious metal sits at -0.46 percent. This is despite the fact that the Federal Reserve has adopted a dovish stance towards their monetary policy and there are serious concerns over the ongoing Trade War between the United States and China. In fact, the mainstream Chinese media has adopted a very aggressive tone against the U.S. with the Chinese media sending a clear warning that the dispute is going to hurt U.S. companies the most because of their exposure in China. According to the "Treaty damage to the U.S. hinterland" a 25% tariff increase on Chinese companies is going to impact 1 million U.S. jobs and will also anchor the financial market turmoil further.
Bond yields are crashing in major markets all around the world as fears of a global economic slowdown have prompted investors to seek shelter in low-risk government debt. Both Germany and Japan's 10-year bond yields are back below zero, marking the first time we've seen German yields turn negative since October 2016. As I shared with you last week, the pool of negative-yielding bonds around the globe now stands at a post-2017 high of $9.32 trillion. Yields in Australia and New Zealand have also fallen to record lows, according to Bloomberg.
Stocks erased their weekly gains and bond yields fell on Friday as investors reacted to a number of economic developments. Chief among them were a Treasury yield curve inversion, the first since before the financial crisis, and continued slowdown in the pace of U.S. manufacturing expansion.
China A-shares are still light years away from their June 12, 2015 peak. But as long as the locals are buying in on Xi Jinping outwitting President Trump, and Wall Street bets on more stimulus, Shanghai and Shenzhen indexes will remain in beast mode. Forget weaker growth. Investors are long China. It surpassed Brazil as the darling of global investors roughly four weeks ago.
Last week I was pleased to attend the Prospectors & Developers Association of Canada (PDAC) conference in Toronto. PDAC is one of the largest mining conferences in the world. More than 25,000 people turned out this year, many of them selling equipment services, exhibiting securities and investments, making presentations and much more.