The trading week ended on a low note Friday as investors digested a dispute between the Treasury and the Federal Reserve that broke late Thursday.
Treasury Secretary Steven Mnuchin said he wouldn’t extend a number of emergency lending programs, prompting a rare public response from the Fed saying that it would prefer those programs remain in place. The Fed found backing for its position on Wall Street.
“Although credit markets have been functioning well since they were introduced in the spring, removal would withdraw an important backstop that, in our view, was key to restoring financial market functioning,” writes a team of Barclays analysts. “The impact from the loss could be seen if there is another credit crunch, which could come into play if there is a substantial darkening of the outlook.”
Meanwhile, states continued to roll out various COVID-related curfews and shutdowns as growing hospitalizations stress the nation’s healthcare resources.
The Dow Jones Industrial Average closed the week with a 0.8% decline to 29,263 on Friday.
Other action in the stock market today:
- The S&P 500 declined by 0.7% to 3,557.
- The Nasdaq held up a little better, losing 0.4% to 11,854.
- The small-cap Russell 2000 managed to eke out a 1-point gain to 1,785.
- U.S. oil futures gained a full 1.0% to reach $42.17 per barrel.
- Gold futures settled at $1,873 per ounce — a 0.6% improvement.
What to Do About Low-Wattage Yields
As the market remains perched near all-time highs, dividends on stocks sit at multiyear lows. The S&P 500, on average, is paying out less than 1.7% at present, which only looks supple if you compare it to the meager 0.9% yield currently offered by the 10-year T-note.
Fortunately, if you’re looking to add to your income portfolio, the market still has a few attractive ways of going about it.
You can play the really long game and look to build yield over time — these 11 dividend growth stocks have upped the ante by double digits this year and have the capacity for big payout hikes going forward.
If you’re more interested in high current yield, European large caps on average deliver more income than their U.S. blue-chip counterparts.
But you can also look to businesses that were literally designed with income in mind: real estate investment trusts (REITs). These real estate owners and operators are required to pay out most of their income as dividends, leading to typically high yields across the sector. This group of 11 high-yield REITs is particularly generous, averaging more than 5% at current prices.