Jerome Powell spoke Tuesday morning in Sweden, however, the Fed Chair didn't say anything that is impacting short-term market movement. He talked about general Fed policy in regard to things such as environmental issues but offered no new hints about short-term policy direction.
Stocks are choppy but with a positive bias so far. Breadth is running slightly positive; we have only 45 new 12-month highs to just 30 new 12-month lows. There are a few pockets of momentum with biotechnology bouncing back from a very poor day Monday. The Nasdaq 100 (QQQ) and small-caps (IWM) are exhibiting a little relative strength.
As we approach earnings season, there appears to be a little more focus on stock-picking. While biotechnology has been one of the leading groups for a while, there are quite a few badly beaten-up small-caps that are attracting some bargain hunting. They are still a very high risk on earnings news, although this is less correlated action, which is always refreshing to see.
I don't often discuss stocks that I hold for the very long term, but I do own a few that are in DRIP (dividend reinvestment plan) accounts that automatically reinvest the dividends.
My best investment long-term has been Altria (MO) , which is primarily a tobacco stock. I bought it back in the mid-1990s and have held a core position since then.
Altria has paid consistently high dividends for many years and has since then spun off some winners, resulting in current names including Kraft Heinz (KHC) , Phillip Morris International (PM) , Mondelez (MDLZ) , and others.
When the value of the dividends and spinoffs are taken into account, MO has outperformed most of the market and favored longer-term names such as Apple (AAPL) and Amazon (AMZN) .
I bring this up because, for the first time in a while, I'm making an additional buy of MO. MO's dividend yield is currently a little over 8% and is trading with a forward P/E of about 10. That is historically a very favorable ratio.
In addition, Altria's management has been very skillful at navigating the issues involved in tobacco and finding ways to continue to increase its dividend. They are currently faced with several substantial issues, but the attraction of the reinvested dividend at this level makes me a buyer.
