American big enterprises restart dividend paying economy and stock market are both optimistic?

category:Finance
 American big enterprises restart dividend paying economy and stock market are both optimistic?


Generally, the decision of a company to pay dividends usually depends on whether management believes that the enterprise has sufficient cash flow for other purposes and the ability to obtain other cash flows. As a result, in the view of some analysts, the resumption of dividend payments by more and more large enterprises means that their management believes that the worst stage of the crisis is over and that the U.S. economy will gradually recover.

Although the plight caused by the epidemic is not completely over, many businesses, from factories to law firms, have learned how to do business during the outbreak, and retailers, fast-food restaurants and car manufacturers are in a better position.

Oil producer Marathon Oil Corp. stopped paying dividends in May because millions of people work at home and no longer need to drive and fly, and consumption of gasoline and jet fuel has fallen, which has hit its business. Last month, it announced that it would resume dividend payments in December.

Gap, a clothing chain, also stopped paying dividends in March, issuing debt and delaying rent payments to keep its cash flow. In late October, Katrina OConnell, its treasurer, said it would resume payment of competitive dividends at the same level as before in early 2021.

Other companies that have resumed or plan to pay dividends include general motors, retail giant tjxcos, olive garden, long horn Steakhouse, Darden restaurants Inc., cosmetics company EST u00e9 eluder cos., and wood giant Weyerhaeuser Co., etc.

Louis navellier, chief investment officer of capital management firm navellier & Associates Inc., said U.S. companies had been trying to release cash flow in the wake of the epidemic and believed that more would return to dividend payments. He advised investors to pay more attention to stocks that pay dividends because interest rates will remain low for a long time.

Is the U.S. economic recovery expected?

Mark Zandi, chief economist at Moodys Analytics, said many of the big companies managed to manage the epidemic this year, and some benefited by taking market share from smaller competitors, according to mark Zandi, chief economist at Moodys Analytics.

The fact that multinational companies are starting to recover from the outbreak is an encouraging sign that their management believes the epidemic will soon be over. He said.

The latest data released on Wednesday showed us durable goods orders grew faster than expected in October, highlighting the continued support of manufacturing to the economy. Orders for durable goods (items that can last at least three years) rose 1.3% month on month (QoQ) and rose to 2.1% in September, according to data released by the commerce department.

Recently, Goldman Sachs also published a research paper, saying: this winters economic growth has contributed more, which means that the economic growth after the implementation of large-scale immunization will be higher, which will improve the economic growth rate in the second quarter of next year and beyond. We remain highly confident that GDP growth in 2021 and 2022 will be higher than market average expectations.

However, there are still many views on the prospects of US recovery.

Its like Michael gapen, chief economist of the United States. The epidemic may disrupt the situation and make the economic outlook more unstable in the coming months, but at the same time, vaccines are in sight.

This is true. The core of the U.S. economy is the job market and consumer spending. These two areas remain particularly vulnerable without a reduction in the number of confirmed cases.

Rubeela Farooqi, chief U.S. economist at high frequency economics, said: as the number of new coronavirus infections continues to accelerate and the government expands restrictions on business operations, companies are likely to increase the scale of layoffs in the coming weeks. In view of the rapid and widespread spread of the epidemic, we have lowered our GDP forecasts for the fourth quarter of this year and the first quarter of next year. Annual GDP growth rates are expected to be 3.5% in the fourth quarter of this year and 1.0% in the first quarter of next year. Zandis forecast is even more pessimistic. It predicts that US GDP will grow by 2% in the fourth quarter of this year, and may show negative growth in the first quarter of next year. The U.S. economic recovery will not be very good from now until we get a new round of fiscal stimulus, it warned. If lawmakers dont work together, it will be very difficult for the U.S. economy to avoid another recession. Source of this article: Yang Bin, editor in charge of the first finance and Economics_ NF4368

Rubeela Farooqi, chief U.S. economist at high frequency economics, said: as the number of new coronavirus infections continues to accelerate and the government expands restrictions on business operations, companies are likely to increase the scale of layoffs in the coming weeks.

Zandis forecast is even more pessimistic. It predicts that US GDP will grow by 2% in the fourth quarter of this year, and may show negative growth in the first quarter of next year. The U.S. economic recovery will not be very good from now until we get a new round of fiscal stimulus, it warned. If lawmakers dont work together, it will be very difficult for the U.S. economy to avoid another recession.