Opening Statement from the August 2015 Dividend Gems

Opening Statement from the August 2015 Dividend Gems

Originally published on August 16, 2015

Earnings

Thus far about 90% of firms have reported Q2 earnings. All things considered, the results aren’t great, but they aren’t bad either. The takeaway on Q2 earnings is..

China and Yuan Devaluation

On August 8, China reported a decline in exports of 8.3% for July. China has also been experiencing sizable capital outflows due to the yuan strength relative to other currencies. Therefore, we consider devaluation of the yuan as a good move because it makes Chinese exports more competitive, slows the flow of capital leaving the country, and sends a message...

For some time now we have been discussing the strengthening of global disinflation (Intelligent Investor). A few years ago we forecast deflation in Europe and it materialized a couple of years later (Intelligent Investor). Even the US experienced a brief period of deflation a few months ago.

We have previously discussed deflation in China. The recent yuan devaluation confirms our suspicion that China...

Capital flows will also be impacted by any nation that raise rates ahead of the rest of the world so long as credit risk is not a factor. It is in part due to this dynamic that we feel the Federal Reserve should not raise interest rates prior to December 2015. We favor early 2016.

The yuan’s recent devaluation will create many ripple effects. Obviously, it is going to...

Investors should overweigh stocks that...

Investors should be patient when looking to build positions in...

Investors should take a defensive approach by...

In conclusion, we believe investors should remain focused on...

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