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Case-Shiller Reports Record +14.6% in April, New Bank Dividends

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Tuesday, June 29, 2021

Off another day of record high closes on the S&P 500 and Nasdaq yesterday, markets are a tad inverted in Tuesday’ pre-market. While the S&P is flat at this hour and the Nasdaq looks to open -30 points, the Dow, which sold off in that growth/value trading cycle we’ve come to know, is +85 so far this morning. This appears to be part of the self-regulating the market has been engaged in since the Great Reopening was assured.

Tech and Healthcare sectors are still trading at record highs, as the S&P 500 is up 2.1% in the month of June. Barring a major reversal during regular trading today and tomorrow, this should be a strong month for the index. The Nasdaq has done even better: following some cyclical investing taking profits from growth names and put into cyclicals, the tech-heavy Nasdaq is back with a vengeance: +5.5% this month.

The Case-Shiller U.S. Home Price Index for April posted its highest figures in more than 30 years of this survey, +14.6% overall, north of the upwardly revised +13.3% reported for March. These figures are in the rearview mirror a bit, and as such may not reflect the supply glut which led to a surge in commodity input prices for the housing market. That said, April represented a record surge in housing values from the final word on the subject.

For the 23rd straight month, Phoenix led the way in home pricing, +22.3%, followed by San Diego at +21.6% and Seattle at +20.2%. All 20 cities in the survey finished higher, with Charlotte, Cleveland, Dallas, Denver and Seattle recording fresh all-time highs in home price value.

After the open into the regular trading day, a new Consumer Confidence Index for June comes out. We’re back toward the highs we haven’t seen since the late 1990s, with projections for 118.7 a step up from the 117.2 reported for May. For historical reference, our all-time lows on this index did not occur during the Covid-19 pandemic, but the Great Recession in the late Aughts.

Yesterday, with the passage of the latest Fed stress test of major U.S. banks — the better to foresee a future financial collapse such as the breakdown that led to the Great Recession — most of the biggest financial institutions on Wall Street wasted no time showering their shareholders with increased dividend yields. JPMorgan (JPM - Free Report) added 10 cents to its dividend, now at a full $1 per share, while Bank of America (BAC - Free Report) bumped its dividend up 17% to 21 cents per share.

Morgan Stanley (MS - Free Report) and Wells Fargo (WFC - Free Report) doubled their quarterly dividend yields, and Well added a generous share buyback to the tune of $18 billion. Year to date, the main Dividend ETF (DIVB - Free Report) has already outperformed the S&P 500: 19% vs. 14%. Only Citigroup (C - Free Report) kept its dividend where it is currently. The dividend moves for JPMorgan and Goldman Sachs (GS - Free Report) are a big reason the Dow is outperforming the other indexes so far this morning.

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