Monday, stocks regained all of the losses of the previous Friday, effectively ending the downturn some pundits believed had arrived. The next two days were spent marking time, but then the market posted nice gains the final two days of the week. As the week ended, all of the major averages I follow were at or above the highs reached around June 10, which is to say the market is flirting once again with new all-time highs, with most issues as over-valued as ever.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated. Since next week covers the end of June and the beginning of July, the list is a bit longer than most weeks.

Main Street Capital (MAIN), 6/28/2021, 5.84%. MAIN is a monthly payer.

AGNC Investment (AGNC), 6/29/2021, 8.40%. AGNC is also a monthly payer.

Ladder Capital (LADR), 6/29/2021, 6.65%.

Innovative Industrial Properties (IIPR), 6/29/2021, 2.87%.

Spirit Realty Capital (SRC), 6/29/2021, 5.19%.

STAG Industrial (STAG), 6/29/2021, 3.84%. STAG pays monthly.

Americold Realty Trust (COLD), 6/29/2021, 2.25%.

Algonquin Power & Utilities (AQN), 6/29/2021, 4.46%.

Goldman Sachs BDC (GSBD), 6/29/2021, 8.85%.

B&G Foods (BGS), 6/29/2021, 5.66%.

Chimera Investment (CIM), 6/29/2021, 8.49%.

Annaly Capital Management (NLY), 6/29/2021, 9.57%.

MFA Financial (MFA), 6/29/2021, 8.21%.

National Health Investors (NHI), 6/29/2021, 5.23%.

Nucor (NUE), 6/29/2021, 1.68%.

Owl Rock Capital (ORCC), 6/29/2021, 8.44%.

Ventas (VTR), 6/30/2021, 3.11%.

Realty Income (O), 6/30/2021, 4.22%. O pays monthly.

Cisco Systems (CSCO), 7/2/2021, 2.79%.

Two of the sixteen CEFs I follow will be going ex-dividend in the week ahead. Both are monthly payers.

First Trust Intermediate Duration Preferred & Income Fund (FPF), 7/1/2021, 6.16%.

AllianceBernstein Global High Income Fund (AWF), 7/1/2021, 6.31%.

One of my stocks will be reporting next week, General Mills (GIS) on 6/30/2021.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Rio Tinto PLC (RIO) was downgraded from Neutral to Sell by UBS.

Royal Dutch Shell (RDS.B) was upgraded from Hold to Buy at Societe Generale.  

Welltower (WELL) was upgraded from Sector UnderPerform to Sector Perform at Scotiabank.

McDonalds (MCD) was reiterated at OverWeight at Wells Fargo.

GlaxoSmithKline PLC (GSK) was upgraded from Sell to Hold at Deutsche Bank.

Colgate Palmolive Co (CL) was initiated at Buy at UBS.

Kimberly-Clark (KMB) and Procter and Gamble (PG) were both initiated at Neutral at UBS.

Oaktree Specialty Lending (OCSL) was initiated at OutPerform at Oppenheimer.

Well, what a difference a week can make. I have now shifted to reviewing my positions, to see if there are any further sell opportunities, and as for possible new buys, “forgeddaboutit”. At least, not until a 10% correction occurs.

JT

Stocks broke out to the downside last week, with Friday logging the largest daily decline seen in some time for the Dow Industrials, the index most followed by the general public, unrepresentative though it is. Before we overreact to a 500 point down day for the Dow, keep in mind it is down just 5% from the peak set 5/10/2021, and two more representative averages, the S&P 500 and the NASDAQ, are only down 2% and 1%, respectively, from their peaks, set just a few days ago, 6/15/2021 and 6/17/2021. This may be the start of an expected correction of 5% to 10%, or maybe not. Even if it is, many if not most stocks will still be over-valued at that point.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

SLR Investment (SLRC), 6/22/2021, 8.55%.

Washington Real Estate Investment Trust (WRE), 6/22/2021, 5.10%.

VICI Properties (VICI), 6/23/2021, 4.08%.

Getty Realty (GTY), 6/23/2021, 4.67%.

Coventa Holdings (CVA), 6/23/2021, 1.87%. CVA is on my Tier4 list, no longer recommended. While not in dire straits, the low yield made CVA no longer worth owning, in my opinion.

Phillip Morris International (PM), 6/24/2021, 4.80%.

Vodafone Group PLC (VOD), 6/24/2021, 5.72%. VOD pays semi-annually. It is on my Tier4 list, no longer recommended. While the yield is enticing, the outlook for any telecoms not named Verizon or AT&T has dimmed.  

Prospect Capital (PSEC), 6/25/2021, 8.25%. PSEC pays monthly.

TotalEnergies SE (TTFNF), 6/25/2021, 6.18%. Formerly Total Petroleum (TOT), this major oil company based in France apparently is attempting to reinvent itself. All things considered, particularly the 30% or so foreign tax withholding experienced by US holders, this firm is not likely to remain recommended after my next review of my lists.

Main Street Capital (MAIN), 6/28/2021, 5.91%.

Two of the sixteen CEFs I follow will be going ex-dividend in the next week, as indicated following. Both are monthly payers.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 6/22/2021, 7.13%.

Miller Howard High Income Equity Fund (HIE), 6/22/2021, 5.39%.

One of my stocks will be reporting next week, Paychex (PAYX), on 6/25/2021.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Welltower (WELL) was upgraded from InLine to OutPerform by Evercore ISI, and from Market Perform to Strong Buy at Raymond James.

Kinder Morgan (KMI) was downgraded from Neutral to Sell at Goldman, and from Buy to Hold at Stifel.

Medical Properties Trust (MPW), Omega Healthcare Investors (OHI), and Realty Income (O) were all initiated at Peer Perform by Wolfe Research.

Ventas (VTR) and Welltower (WELL) were both initiated at OutPerform by Wolfe Research.

SLR Investment (SLRC) was resumed at OutPerform at Oppenheimer.

Nucor (NUE) was initiated at Neutral at JP Morgan.

Enbridge (ENB) was upgraded from Neutral to OutPerform at Credit Suisse.

Omega Healthcare Investors (OHI) was downgraded from Sector OutPerform to Sector Perform at Scotiabank.

Washington Real Estate Investment Trust (WRE) was downgraded from OutPerform to Market Perform at Raymond James.

Altria (MO) was initiated at Neutral at Redburn.

Coca Cola (KO) was reiterated at Buy at Argus.

National Health Investors (NHI) was upgraded from UnderPerform to Market Perform at BMO Capital. 

Occidental Petroleum (OXY) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Compass Minerals International (CMP) was downgraded from Neutral to UnderWeight at JP Morgan.

As noted, stocks pulled back last week. The main question is whether this will morph into a 5% to 10% summer correction, or not. No resource I have looked at expects anything beyond a minor correction, and I concur that a major decline is unlikely. I was planning on selling some of my CEF holdings last week, while the market was making new highs, but missed the opportunity. My criteria was that the CEF’s post-Covid high was a 20 year high, that the CEF was selling at a premium over the NAV of its holdings, and I had a substantial gain to harvest. I placed limit orders, none filled. Right now, I’m more focused on buying than selling, if this correction continues. My point is, take what the market gives you, if it is enough to be worth selling or buying. Usually, it is neither, so the best thing to do then is nothing.

JT

The major averages I follow moved very little last week, with the Dow Industrials declining slightly, the NASDAQ gaining slightly, and the S&P 500 basically flat. It was a quiet week for stocks, with nothing much in the way of a catalyst to trigger an advance nor a decline. The market may be signaling that it is topping, with a 5% to 10% decline not far off. At least, that is what some pundits are saying is likely to occur.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Digital Realty Trust (DLR), 6/14/2021, 2.83%.

Ares Capital (ARCC), 6/14/2021, 8.02%.

Oaktree Specialty Lending (OCSL), 6/14/2021, 7.59%.

Coca Cola Co (KO), 6/14/2021, 2.99%.

Iron Mountain (IRM), 6/14/2021, 5.33%.

Altria (MO), 6/14/2021, 6.91%.

Monroe Capital (MRCC), 6/15/2021, 8.73%.

PennantPark Floating Rate (PFLT), 6/16/2021, 8.76%. PFLT pays monthly.

PennantPark Investment (PNNT), 6/16/2021, 6.90%.

Apollo Investment (AINV), 6/16/2021, 8.22%.

Medical Properties Trust (MPW), 6/16/2021, 5.12%.

Gladstone Investment (GAIN), 6/17/2021, 5.68%. GAIN pays monthly.

Greif (GEF), 6/18/2021, 2.74%.

Twelve of the sixteen CEFs I follow will be going ex-dividend in the next seven trading days, 6/14/2021 through 6/22/2021.  All are monthly payers except one, which is indicated below.

BlackRock Debt Strategies Fund (DSU), 6/14/2021, 6.85%.

BlackRock Enhanced Equity Dividend Trust (BDJ), 6/14/2021, 5.68%.

Nuveen Real Asset Income and Growth Fund (JRI), 6/14/2021, 7.02%.

BlackRock Energy and Resources Trust (BGR), 6/14/2021, 4.93%.

Nuveen Dow 30SM Dynamic Overwrite Fund (DIAX), 6/14/2021, 6.28%. DIAX is a quarterly payer.

Cohen & Steers MLP Income & Energy Opportunity Fund (MIE), 6/15/2021, 4.26%.

Cohen & Steers Quality Income Realty Fund (RQI), 6/15/2021, 5.92%.

Gabelli Utility Trust (GUT), 6/15/2021, 7.80%.

Gabelli Dividend & Income Trust (GDV), 6/15/2021, 4.93%.

Clarion Global Real Estate Income Fund (IGR), 6/18/2021, 6.63%.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 6/22/2021, 7.13%.

Miller Howard High Income Equity Fund (HIE), 6/22/2021, 5.39%.

None of my stocks will be reporting next week.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

AGNC Investment (AGNC) and Annaly Capital Management (NLY) were both downgraded from OutPerform to Market Perform at Keefe Bruyette.

Colgate Palmolive Co (CL) was upgraded from Neutral to OutPerform at Credit Suisse.

Total Energy Services (TOT) was initiated at Buy at MKM Partners.

United Parcel Service (UPS) was upgraded from Neutral to OverWeight at JP Morgan.

Ventas (VTR) was upgraded from Equal Weight to OverWeight at Barclays.  

The weekly market action for the week just ended was essentially more of the same. The market doesn’t know which way to go from here. Based on numerous market valuation methodologies, the next leg may be down. But as always, no one knows for sure at this point,

JT

Stocks gained three days out of four in the short first week of June, but did not move much on any one  day. The much-anticipated employment report on Friday still disappointed, but the miss was not nearly as bad as April’s report a month ago. Cryptos have stopped their free-fall, but that is about the best that can be said for that sector at this point. Supply bottlenecks, labor shortages, and more price inflation than seen in years have combined to slow the economic recovery from the pandemic, even as the number of cases continues to decline. The “roaring recovery economy” that was expected at this point, by some at least, is not occurring. When the market concludes that it definitely is not coming, look out below!

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Gladstone Investment (GAIN), 6/7/2021, 5.75%. This BDC pays monthly.

Public Service Enterprise Group (PEG), 6/7/2021, 3.33%.

Kimco Realty (KIM), 6/8/2021, 3.07%.

Compass Minerals (CMP), 6/9/2021, 4.21%.

Occidental Petroleum (OXY), 6/9/2021, 0.14%. After reducing the once-generous dividend to a penny per quarter, OXY landed on my Tier4 list, no longer recommended. The stock has been slowly recovering, and has received several upgrades in recent months. I expect that a meaningful dividend will be reinstated at some point, but it is unlikely to yield what it once did before the big slash.

Williams Companies (WMB), 6/10/2021, 5.87%.

Golub Capital (GBDC), 6/10/2021, 7.22%.

Digital Realty Trust (DLR), 6/14/2021, 2.99%.

Ares Capital (ARCC), 6/14/2021, 8.11%.

Oaktree Specialty Lending (OCSL), 6/14/2021, 7.66%.

Coca Cola Co (KO), 6/14/2021, 2.99%.

Iron Mountain (IRM), 6/14/2021, 5.43%.

Altria (MO), 6/14/2021, 6.91%.

Six of the CEFs I follow will be going ex-dividend in the week ahead. All are monthly payers except one, which is indicated below.

Dividend and Income Fund (DNIF), 6/11/2021, 6.88%.

BlackRock Debt Strategies Fund (DSU), 6/14/2021, 6.88%.

BlackRock Enhanced Equity Dividend Trust (BDJ), 6/14/2021, 6.88%.

Nuveen Real Asset Income and Growth Fund (JRI), 6/14/2021, 7.26%.

BlackRock Energy and Resources Trust (BGR), 6/14/2021, 5.03%.

Nuveen Dow 30SM Dynamic Overwrite Fund (DIAX), 6/14/2021, 6.31%. DIAX is a quarterly payer.

None of my stocks will be reporting next week.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Pan American Silver (PAAS) was reiterated at Sector Perform at RBC Capital Markets.

Mid-America Apartment Communities (MAA) was downgraded from OutPerform to Market Perform at BMO Capital.

Occidental Petroleum (OXY) was upgraded from Equal Weight to OverWeight at Barclays.

Realty Income (O) was upgraded from Neutral to Buy at Mizuho.

Last week’s market action seemed to me to be indicative of a “wait and see” approach being taken by most market players. My approach is one of cautious profit-taking, as long-time holdings reach levels not seen in years, or ever in some cases. It is not a “sell everything and head for the hills” approach, but rather an opportunity to get out of positions on the best terms ever seen, or at least not seen in years. I am willing to forego some dividend income for a while in the interest of being ready for a major decline. I am keeping a list of buy / buy back candidates ready, mostly the higher-yielding stocks on my Tier1, Tier2, and Tier3 lists. I have in the past dropped stocks from my lists when yields have declined to today’s levels. At this point I’m holding off, but there is no doubt that share prices have increased in many cases much more than dividends have increased, knocking yields down below historical levels. Just one more sign that most stocks are currently over-valued. That’s my strategy and I’m sticking to it!

JT

Stocks charged out of the gate Monday last week, retreated a bit on Tuesday, then posted three modestly positive days, ending the week on the plus side. The decline in Bitcoin and other crypto currencies slowed, but still continued. The market remains over-valued, with many issues that previously had been viewed as having generous yields now offering not-so-generous yields.

To illustrate this, all one needs to do is view the following, stocks on my lists going ex-dividend in the week ahead. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

NextEra Energy (NEE), 6/1/2021, 2.11%.

Newmont (NEM), 6/2/2021, 2.39%.

PotlatchDeltic (PCH), 6/3/2021, 2.72%.

Pepsico (PEP), 6/3/2021, 2.94%.

Kimberly-Clark (KMB), 6/3/2021, 3.43%.

Gladstone Investment (GAIN), 6/7/2021, 5.97%. This BDC pays monthly.

Public Service Enterprise Group (PEG), 6/7/2021, 3.29%.

Two of the CEFs I follow will be going ex-dividend in the week ahead. Both are monthly payers.

First Trust Intermediate Duration Preferred & Income Fund (FPF), 6/1/2021, 6.17%.

AllianceBernstein Global High Income Fund (AWF), 6/3/2021, 6.46%.

Two of my stocks will be reporting in the week ahead, JM Smucker Co (SJM) on 6/3/2021, and NGL Energy Partners LP (NGL), also on 6/3/2021. Note that NGL is no longer recommended, and is on my Tier4 list.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Public Service Enterprise Group (PEG) was upgraded from Sell to Hold at Deutsche Bank.

Apollo Investment (AINV) was downgraded from OverWeight to Equal Weight at Wells Fargo.

ONEOK (OKE) was upgraded from UnderWeight to Equal Weight at Morgan Stanley.

Enlink Midstream LLC (ENLC) was downgraded from OutPerform to Sector Perform at RBC Capital.

Kinder Morgan (KMI) was downgraded from Equal Weight to UnderWeight at Morgan Stanley.

Magellan Midstream Partners LP (MMP) was downgraded from OverWeight to Equal Weight at Morgan Stanley.

Occidental Petroleum (OXY) was upgraded from Neutral to Buy at Goldman.  

I’m not usually a “doom and gloom” prognosticator, right every 10 years or so, but it is hard to be optimistic about the markets just now. By just about any historical measure you want to use, valuations are stretched, and the upside is limited. Yet, irrational valuations of themselves do not necessarily cause a market crash, there has to some catalyst or event that upsets the fragile equilibrium. A high-wire act can go on for some time, history has shown. I have made a decision to carry a higher cash position than usual, and I’m ok with that, even if the wait becomes tiresome. Better to be a few months early than a few days late. Most economic observers have to be concerned about the effects of the excessive government stimulus and resulting deficits and the longer-term economic impact. The political divide at home is as wide as ever, and the international situation is certainly not favorable. My expectation is that a market decline will occur sooner or later, the major unknown is the timing. Hey, I said this last week. I’m consistent, at least!

JT

Stocks churned mostly in place last week, ending a bit below where they began it, for most of the averages I track. The NASDAQ was an exception, ending just slightly above the prior week’s close. The flare-up in the Middle East dominated the headlines. Adding to the unease was a major decline in Bitcoin and other crypto currencies, indicating the fragility of the gains realized by the crypto traders.

Stocks on my lists going ex-dividend in the week ahead are listed following, with the date and current yield, based on Friday’s close, indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Pan American Silver (PAAS), 5/24/2021, 0.90%.

Johnson & Johnson (JNJ), 5/24/2021, 2.49%. 

Eni S p A (E), 5/24/2021, 3.43%. E pays semi-annually. This Italian integrated oil company was at one time favored over the US-based giants, as a better buy and yield. Not so today, it is on my Tier4 list. Another factor is both E and Total SE (TOT), the French integrated oil company, have significant foreign tax withholding imposed on US shareholders, which results in a substantially reduced yield.

Prudential Financial (PRU), 5/24/2021, 4.27%.

Prospect Capital (PSEC), 5/26/2021, 8.69%. PSEC pays monthly.

AGNC Investment (AGNC), 5/27/2021, 7.81%. AGNC pays monthly.

Barrick Gold (GOLD), 5/27/2021, 1.46%.

Main Street Capital (MAIN), 5/27/2021, 6.01%. MAIN pays monthly.

STAG Industrial (STAG), 5/27/2021, 4.07%. STAG pays monthly.

Kraft Heinz (KHC), 5/27/2021, 3.53%.

Brookfield Renewable Partners LP (BEP), 5/27/2021, 3.03%.

Lumen Technologies (LUMN), 5/28/2021, 7.04%.

Kellogg (K), 5/28/2021, 3.50%.

McDonalds (MCD), 5/28/2021, 2.22%.

Safety Insurance Group (SAFT), 5/28/2021, 4.18%.

Realty Income (O), 5/28/2021, 4.21%.

None of the CEFs I follow will be going ex-dividend in the week ahead.

None of my stocks will be reporting in the week ahead.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Occidental Petroleum (OXY) was upgraded from Hold to Buy at Societe Generale.

Pan American Silver (PAAS) was upgraded from Sector Perform to OutPerform at National Bank Financial.

Williams Cos (WMB) was upgraded from Hold to Buy at Argus.

Alliant Energy (LNT) was upgraded from Neutral to Buy at Mizuho.

Healthpeak Properties (PEAK) was downgraded from OverWeight to Neutral at JP Morgan.

Lumen Technologies (LUMN) was downgraded from OutPerform to Perform at Oppenheimer.

Intel (INTC) was resumed at OverWeight at KeyBanc.

AT&T (T) was upgraded from Neutral to Buy at both UBS and New Street. T has been in the financial news all week following a blockbuster merger announcement, with a likely dividend cut coming. These rating firms apparently approve of the deal.

Welltower (WELL) was upgraded from Equal Weight to OverWeight at Capital One.

Cisco Systems (CSCO) was downgraded from Buy to Hold at DZBank.

Energy Transfer LP (ET) was initiated at Buy at Citigroup.

The market has been consolidating since the highs reached around May 10 or so, seemingly undecided about which way to go. The boom times expected with the virus winding down are running into labor and supply shortages, and prices are going up at an alarming pace. Deep down, most economic observers have to be concerned about the effects of the government stimulus and resulting deficits and the longer-term economic impact. The political divide at home is as wide as ever, and the international situation is certainly not favorable. My expectation is that a market decline will occur sooner or later, the major unknown is the timing.

JT