Stocks continued to decline last week, with the headline Dow Industrials index posting a loss each and every day, although only one day, Tuesday, was into the triple digits. The pundits are mostly agreed that the “Trump Rally” is ending, with some predicting a major pullback, as the

President’s plans run into a wall of opposition from the vested interests, as the “swamp” fights back. Admittedly, the administration has been hampered somewhat, but my view is they will learn from their missteps and regroup. One thing that is becoming apparent is that the markets are influenced much more by geopolitical developments than by investment fundamentals these days, and have been for some time.

A few more stocks I follow are going ex-dividend this week, as follows:

Enerplus (ERF), 3/27/2017, yield 1.19%. ERF pays monthly.

MFA Financial (MFA), 3/27/2017, yield 9.82%.

AGNC Investment (AGNC), 3/29/2017, yield 10.87%. AGNC pays monthly.

STAG Industrial (STAG), 3/29/2017, yield 5.59%. STAG is a monthly payer also.

Windstream Holdings (WIN), 3/29/2017, yield 10.70%.

Annaly Capital Management (NLY), 3/29/2017, yield 10.71%.

National Health Investors (NHI), 3/29/2017, yield 5.29%.

Nucor (NUE), 3/29/2017, yield 2.46%.

Realty Income (O), 3/30/2017, yield 4.24%. O pays monthly.

Kimco Realty (KIM), 4/3/2017, yield 4.80%.

As for earnings, two of my stocks reported last week as scheduled, General Mills (GIS) on 3/21/2017, and ConAgra Foods (CAG) on 3/23/2017. For earnings details, see the firm’s press releases, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha.

The week ahead will again see two of the firms I track reporting earnings, Darden Restaurants (DRI) on 3/28/2017, and Paychex (PAYX) on 3/29/2017. DRI, the only restaurant stock paying any kind of dividend, has defied gravity for a long time, posting decent results in spite of being in an extremely crowded, competitive sector in our “over-restauranted” economy. It will be interesting to see if the outperformance continues.

The pace of upgrades/downgrades has slowed somewhat since the end of earnings season, but as always, there were a few analysts putting forth their opinions last week. While I seldom agree with the opinions, I still find it to be of interest the see what they are, sometimes as a guide as to what NOT to do. Here they are:

Welltower (HCN) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

HCP Inc (HCP) was upgraded from UnderWeight to Equal Weight at Morgan Stanley.

These are not ringing endorsements, for good reason. The healthcare sector and everything related to it is almost entirely dependent upon the government and insurance companies for continued prosperity, and both are taking unsustainable losses that cannot continue indefinitely. Change is coming to the “Medical Industrial Complex”, deservedly so, but no one knows what that change will be. That is not a formula that inspires investment in the firms that will be impacted, most likely negatively.

Pan American Silver (PAAS) was upgraded from Sector Perform to OutPerform at RBC Capital Markets.

Buckeye Partners L P (BPL) was initiated at Hold at SunTrust.

Colgate Palmolive (CL), Coca Cola (KO), Kimberly Clark (KMB), and Procter & Gamble (PG) were all initiated at Neutral at JP Morgan. Again, a vote of minimal confidence, as the biggest, safest stocks the market has to offer are only rated as Neutral.

ConAgra (CAG), General Mills (GIS), Kellogg (K), and J M Smucker Co were all downgraded from Market Perform to UnderPerform at Bernstein. Ditto what I said immediately preceding, the same comment applies.

Freeport-McMoRan (FCX) was upgraded from Sell to Hold at Deutsche Bank.

Ventas (VTR) was initiated at Hold at SunTrust.

General Mills (GIS) was downgraded from Buy to Hold at Stifel.

Frontier Communications (FTR) was downgraded from Neutral to Sell at Goldman.

Windstream Holdings (WIN) was resumed at Sell at Goldman.

Freeport-McMoRan (FCX) was upgraded from Sell to Hold at Berenberg.

Altria (MO) and Norfolk Southern (NSC) were both downgraded from Sector Perform to UnderPerform at RBC Capital Markets.

General Mills (GIS) was reiterated at Hold at Argus.

Unilever (UN, UL) was upgraded from Equal Weight to OverWeight at Barclays.

Calumet Specialty Products Partners L P (CLMT) was downgraded from Neutral to UnderPerform at Credit Suisse.

Entergy (ETR) was downgraded from Buy to Neutral at Goldman.

Considering the escalating political war in Washington, the public and private debt levels, and the deteriorating international situation, the market outlook is about as gloomy as has been seen for years. Decades of the “go along, get along” and “kick the can down the road” policies of our political “leaders” since Reagan have put us now in a situation where these approaches are not going to stave off a reckoning much longer. The upgrades/downgrades alone are as bearish as I can remember for a given week. The biggest, safest, most stable firms are given lackluster prospects, while precious metals firms, the perennial lowest of the low as far as Wall Street is concerned, are upgraded. This reflects the extreme bearish sentiment. But what really bothers me is I agree with that sentiment, even as the adage “what the consensus believes is usually wrong” is in the back of my mind. To reconcile this internal conflict, I have determined that I WILL buy if a decline opens up buy opportunities for the safest, strongest, etc. firms, but not until their prices come down somewhat. That may be about to happen. Until it does, I’m holding on to my cash (even though it yields nothing), and waiting.

JT

Stocks declined four days out of five last week, but the declines were modest, and the one positive day on Wednesday, which saw a triple-digit gain on the Dow Industrials index, resulted in a net gain for the week. The gain occurred mostly after the Fed announced a rate increase Wednesday afternoon. Even though the increase was widely expected, and few expected a major sell-off, it shows just how upside down things have become when a Fed rate increase, expected or not, triggers a substantial rally.

A relatively short list of stocks on my lists going ex-dividend this week follows:

Gladstone Investment (GAIN), 3/20/2017, yield 8.34%. GAIN pays monthly.

PennantPark Investment (PNNT), 3/20/2017, yield 8.96%.

Solar Capital (SLRC), 3/21/2017, yield 7.23%.

Phillip Morris (PM), 3/21/2017, yield 3.69%.

Enerplus (ERF), 3/27/2017, yield 1.10%. ERF pays monthly. The one-time dividend stalwart could pay the current dividend, one cent CAN, daily and it wouldn’t be all that much.  

MFA Financial (MFA), 3/27/2017, yield 9.99%.

None of my stocks reported last week. This week, two companies I track will be reporting, General Mills (GIS) on 3/21/2017, and ConAgra Foods (CAG) on 3/23/2017.

Upgrades/downgrades of note coming out last week were as listed below:

Kimco Realty (KIM) was upgraded to OutPerform at Robert W. Baird.

United Parcel Service (UPS) was initiated at Market Perform at Wells Fargo.

Norfolk Southern (NSC) was initiated at OutPerform at Wells Fargo.

Windstream Holdings (WIN) was resumed at Neutral at JP Morgan.

Intel (INTC) was downgraded from OutPerform to Neutral at Credit Suisse.

Ventas (VTR) was downgraded from Neutral to Sell at Goldman.

Barrick Gold (ABX) was upgraded from Sector Perform to OutPerform at RBC Capital Markets.

Newmont Mining (NEM) was downgraded from OutPerform to Sector Perform at RBC Capital Markets.

Entergy (ETR) was upgraded from Market Perform to OutPerform at Wells Fargo.

Greif (GEF) was initiated at Buy at Sidoti.

With the end of earnings season and the continuing political discourse dominating headlines, it looks like the week ahead will be relatively quiet, as far as the markets are concerned. No one is exceptional bullish, and quite a few pundits are predicting a market decline of some magnitude is in store. History shows us that the expectations of a decline is the very thing that will likely prevent it from happening. When nearly everyone is bullish and “Dow 50,000” talk is in the air, that’s when it will be time to sell everything and head for the hills. While now is a time to be cautious, and most stocks are richly-valued, it isn’t time yet to bail out of stocks and run for cover.

JT

Stocks declined steadily through Wednesday of last week, then ended the week Friday with a modest gain, after an encouraging monthly Jobs report. The week ahead may see a Fed rate hike on Wednesday. Since it is expected, it probably will not precipitate a major sell off, although a modest decline is likely.

A number of my stocks will be going ex-dividend next week, as follows:

Fifth Street Finance (FSC), 3/13/2017, 4.73%. FSC pays monthly.

Ares Capital (ARCC), 3/13/2016, yield 8.63%.

Coca Cola (KO), 3/13/2016, yield 3.52%.

Altria (MO), 3/13/2016, yield 3.20%.

Merck (MRK), 3/13/2016, yield 2.85%.

Digital Realty (DLR), 3/13/2016, yield 3.58%.

Frontier Communications (FTR), 3/13/2016, yield 16.15%.

Iron Mountain (IRM), 3/13/2016, yield 6.45%.

Washington Real Estate (WRE), 3/13/2016, yield 3.95%.

TICC Capital (TICC), 3/14/2016, yield 11.16%.

Crown Castle (CCI), 3/15/2016, yield 4.20%.

Monroe Capital (MRCC), 3/15/2016, yield 9.06%.

Greif (GEF), 3/15/2016, yield 3.17%.

Total S A (TOT), 3/15/2016, yield 5.43%.

Blackrock Capital Investment (BKCC), 3/15/2016, yield 10.98%.

Horizon Technology Finance (HRZN), 3/16/2016, yield 12.72%. HRZN pays monthly.

Apollo Investment (AINV), 3/17/2016, yield 10.27%.

Main Street Capital (MAIN), 3/17/2016, yield 6.06%. MAIN pays monthly.

Gladstone Investment (GAIN), 3/20/2016, yield 8.81%. GAIN pays monthly.

PennantPark Investment (PNNT), 3/20/2016, yield 9.06%.

All 3 stocks on my lists scheduled to report last week did so as scheduled. See last week’s posting for the names and reporting dates. For earnings details, see the firm’s press releases, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha.

As for the upcoming week, none of the stocks I follow are scheduled to report.

Upgrades / downgrades on my stocks coming out last week were as follows:

Greif (GEF) was upgraded from Market Perform to OutPerform at Wells Fargo.

Magellan Midstream L P (MMP) was downgraded from Buy to Neutral at Citigroup.

Procter & Gamble (PG) was downgraded from Buy to Neutral at B. Riley & Co.

Diebold Nixdorf (DBD) was downgraded from OutPerform to Inline at Imperial Capital.

TICC Capital (TICC) was downgraded from Neutral to Sell at National Securities.

Frontier Communications (FTR) was downgraded from Buy to Neutral at BofA/Merrill.

Novartis (NVS) was downgraded from Neutral to UnderPerform at Exane BNB Paribas.

Consolidated Communications (CNSL) was reiterated at Hold at Raymond James.

Kimberly Clark (KMB) was downgraded from Buy to Hold at Societe Generale.

HCP Inc (HCP) was initiated at Neutral at Robert W. Baird.

Senior Housing Properties Trust (SNH) was initiated at Neutral at Robert W. Baird.

Medical Properties Trust (MPW) was initiated at OutPerform at Robert W. Baird.

Public Service Enterprise Group (PEG) was reiterated at Sector Perform at RBC Capital Markets.

Crown Castle International (CCI) was upgraded to OutPerform at Wells Fargo.

Novartis (NVS) was upgraded from Hold to Buy at Societe Generale.

Exxon Mobil (XOM) was reiterated at Hold at HSBC Securities.

GlaxoSmithKline (GSK) was initiated at Buy at Liberum, and at Reduce at Kepler.

Novartis (NVS) was initiated at Buy at Liberum.

Sanofi (SNY) was initiated at Hold at Liberum.

Roche Holdings LTD (RHHBY) was initiated at Hold at Liberum.

The economic news for the week ahead will likely be focused on the Fed meeting amid expectations of a rate increase. Even the most “dovish” members of the decision-making committee will have to admit, if not now, when will rates ever be increased? Still, don’t expect any large jump – a quarter point rise will be it for this round, I expect, along with everyone else.

The pundits are also saying the market will take it in stride this time, which I also concur with. My reasoning is that the markets collectively have a lot more pressing matters to worry about than a minimal Fed quarter-point increase in the discount rate. And I am right there along with the markets, in the sense of being worried about other matters much more than the Fed.    

JT

After a sluggish start to the week, stocks exploded higher on Wednesday March 1 following the Tuesday night Presidential speech, which was well received by the market, as well as the nation. While the next day gave back some of the gains, the headline Dow Industrials Index held above the 21000 level into the Friday close.

While stock price gains are nice to see, they come and go, and cannot be counted on for income. To realize a steady income from stocks, you must own dividend-paying stocks. Stocks on my lists going ex-dividend this week are as follows:

Triangle Capital (TCAP), 3/6/2017, yield 9.28%.

Newmont Mining (NEM), 3/7/2016, yield 0.45%. NEM is no longer a dividend stock, but rather a bet on an increase in the price of gold.

Waste Management (WM), 3/8/2016, yield 2.32%.

Public Service Enterprise Group (PEG), 3/8/2016, yield 3.76%.  

SCANA (SCG), 3/8/2016, yield 3.50%.

Wal-Mart Stores (WMT), 3/8/2016, yield 2.78%.

Reynolds American (RAI), 3/8/2016, yield 3.31%.

Kimberly Clark (KMB), 3/8/2016, yield 2.88%.

DrPepper Snapple (DPS), 3/10/2016, yield 2.45%.

Ares Capital (ARCC), 3/13/2016, yield 8.55%.

Coca Cola (KO), 3/13/2016, yield 3.48%.

Altria (MO), 3/13/2016, yield 3.22%.

Merck (MRK), 3/13/2016, yield 2.85%.

Digital Realty (DLR), 3/13/2016, yield 3.46%.

Frontier Communications (FTR), 3/13/2016, yield 8.55%.

Iron Mountain (IRM), 3/13/2016, yield 6.05%.

All 6 stocks on my lists scheduled to report last week did so as scheduled. See last week’s posting for the names and reporting dates. For earnings details, see the firm’s press releases, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha.

Earnings reports expected this week are listed as follows, by date:

3/7/2017

Horizon Technology Finance (HRZN), Monroe Capital (MRCC).

3/8/2017

Blackrock Capital Investment (BKCC).

Upgrades / downgrades on my stocks coming out last week were as follows:

Public Service Enterprise Group (PEG) was downgraded from OutPerform to Market Perform at Wells Fargo.

Unilever UL) was upgraded from UnderPerform to Neutral at BofA/Merrill.

Main Street Capital (MAIN) was downgraded from Strong Buy to OutPerform at Raymond James.

Hershey (HSY) was upgraded from Sell to Hold at Societe Generale.

CenturyLink (CTL) was initiated at Neutral at MoffattNathansan.  

Frontier Communications (FTR) was downgraded from OverWeight to Neutral at JP Morgan.

Southern Co (SO) was downgraded from Buy to Hold at Argus Research.

Emerson Electric (EMR) was upgraded from Reduce to Hold at HSBC.

SCANA (SCG) was upgraded from Neutral to Buy at UBS.

General Dynamics (GD) was downgraded from Buy to Neutral at Citigroup.

Intel (INTC) was downgraded from Market Perform to UnderPerform at Bernstein.

Waste Management (WM) was downgraded from OverWeight to Equal Weight at Barclays.

Hershey (HSY) was reiterated at Sector Perform at RBC Capital Markets.

Exxon Mobil (XOM) was upgraded from UnderPerform to Neutral at Credit Suisse.

Windstream (WIN) was upgraded from UnderPerform to Hold at Jeffries.

Southern Co (SO) was upgraded from Hold to Buy at Jeffries.

McDonalds (MCD) was reiterated at OutPerform at Telsey Advisory Group.

Greif (GEF) was upgraded from UnderPerform to Neutral at DA Davidson.

DrPepper Snapple (DPS) was upgraded from Hold to Buy at Jeffries.

The market just keeps going up, even as the pundits continue to point out that earnings, both current and projected, cannot justify the valuations we are seeing. The question is, is today analogous to 1995, when the pundits said the same thing, which was then followed by five more years of gains, or 1999, when the long-predicted crash finally happened in early 2000. With Fed tightening apparently imminent, the demographics weighing against economic growth, and the outsized Federal debt at stratospheric levels, which may lead to a fiscal crisis, I don’t think we are in for another five years of gains from this point. That means it is time to think about taking some profits and building up cash. I’m not saying sell everything and head for the hills – just consider gradually shifting more to cash by unloading an over-valued stock here and there.

JT

The rally continues, as Friday marked day 11 in the string of consecutive positive closes on the venerable Dow Industrials Index. The vitriol continues in Washington and elsewhere, as any hope of co-operation between the major parties has long since faded. Not that anyone living can remember, but some have said it is approaching levels last seen in 1860. But the markets do not seem to be concerned, so maybe it is not as bad as it seems. Meanwhile, stocks on my lists going ex-dividend this week are listed below, with ex-dividend date and yield shown. Frequency is quarterly, unless otherwise indicated.

McDonalds (MCD), 2/27/2017, yield 2.93%.

Realty Income (O), 2/27/2017, yield 4.02%. O pays monthly.

Safety Insurance Group (SAFT), 2/27/2017, yield 3.79%.

Kellogg (K), 2/27/2017, yield 2.78%.

CenturyLink (CTL), 3/1/2017, yield 8.74%.

Pepsico (PEP), 3/1/2017, yield 2.75%.

Novartis (NVS), 3/1/2017, yield 3.48%. NVS pays annually. I listed NVS last week as going ex-dividend 2/24/2017, but that apparently was an error. 

Hercules Capital (HTGC), 3/1/2017, yield 8.74%

Ensco (ESV), 3/2/2017, yield 0.38%. ESV once paid a decent dividend, before the oil price implosion. ESV is now a speculative bet on an eventual recovery in the offshore oil exploration sector.

Eaton (ETN), 3/2/2017, yield 3.33%.

Ventas (VTR), 3/3/2017, yield 4.88%.

Potlatch (PCH), 3/3/2017, yield 3.35%.

Triangle Capital (TCAP), 3/6/2017, yield 8.94%.

Last week I missed NextEra (NEE), which went ex-dividend 2/24/2017, yielding 3.07%.

All 15 stocks on my lists scheduled to report last week did so as scheduled. See last week’s posting for the names and reporting dates. For earnings details, see the firm’s press releases, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha.

Earnings reports expected this week are listed as follows, by date:

2/27/2017

Senior Housing Properties Trust (SNH), Ensco (ESV), Frontier Communications (FTR), ONEOK Partners L P (OKS).

3/1/2017

Windstream (WIN), Greif (GEF).

Upgrades / downgrades on my stocks coming out last week were as follows:

Verizon (VZ) was upgraded from Neutral to Buy at MuffettNathanson.

Colgate Palmolive (CL) was upgraded from Neutral to OutPerform at Exane BNP Paribas.

Freeport-McMoRan (FCX) was downgraded from Hold to Sell at Deutsche Bank, and was initiated at Neutral at Citigroup.

Waste Management was reiterated at Neutral at Wedbush.

Wal-Mart Stores (WMT) was upgraded from Neutral to Buy at BofA/Merrill, and was reiterated at Hold at Stifel Nicolaus, and at UnderPerform at RBC Capital Markets.

Diebold Nixdorf (DBD) was initiated at OutPerform at Credit Suisse.

Universal Parcel Service (UPS) was downgraded from Buy to Neutral at BofA/Merrill.

Reynolds American (RAI) was downgraded from OutPerform to Market Perform at Wells Fargo.

Hercules Capital (HTGC) was reiterated at OutPerform at FBR & Co, and was downgraded to Market Perform at Raymond James.

Solar Capital (SLRC) was downgraded from Buy to Neutral at Ladenburg Thalmann.

Hercules Capital (HTGC) was downgraded from OutPerform to Market Perform at Raymond James.

The Bears have been decimated since November 8. No one predicted a monster rally if Trump was elected. In fact, the prediction was a 1000 point drop in the Dow Industrials right away, with more to come after that. Of course, every dog (or bear) has its day, so a pullback may be coming. But after what we have seen, it will take a very committed bear to short this market. On the other hand, bulls have to wonder how much longer this can go on, and if they should take some money off the table. My advice remains the same – be cautious either way. If buying, know you are paying up, with prices at highs not seen since before the 2008 financial crisis in many cases, and if selling, know that it may be a long wait to get back in at a price below where you sold, if the oft-predicted but elusive correction doesn’t show up soon..

JT