Late Breaking News - Fri July 27, 2024

July 27, 2024 By Scott Rothbort Leave a Comment

After the market closed today, AT&T& (T) announced an additional 300 million share (that’s shares not dollars) repurchase program. This is on top of the already existing appproximate 150 million shares remaining on the prior authorization.

The new buy back amounts to about 5% of outstanding shares.

You may wonder why not boost the dividend as well right now? I think that the board will do so in the fall by a penny or two.

The stock rose by about 1% in light after hours trading.

Long T - part of our High Dividend Low Volatilty Strategy available exclusively at Covestor

Filed Under: All-Star Originals, Buybacks, Stocks, Tech, Telecom

About Scott Rothbort

Scott Rothbort has over 25 years of experience in the financial services industry. He is the Founder and President of LakeView Asset Management, LLC, www.lakeviewasset.com a Registered Investment Advisor specializing in customized separate account management for high net worth individuals. In addition, he is the founder of TheFinanceProfessor.com www.thefinanceprofessor.com an educational social networking site where his blog also resides; and, publisher of The LakeView Restaurant & Food Chain Report www.restaurantstox.com , a newsletter focusing on investment and trading ideas in the food, restaurant and agricultural sectors. Mr. Rothbort is also a Term Professor of Finance at Seton Hall University’s Stillman School of Business, where he teaches courses in finance and economics; is the Chief Market Strategist for The Stillman School of Business; and, the co-supervisor of the Center for Securities Trading and Analysis. Feel free to reach out to Scott Rothbort by email at [email protected]

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Platinum Chat

sonny

July 30, 2024 - 9:06 am

@Jeff: The Fed is a giant hedge fund. They can't and won't know how to exit their massive bond holdings. The Fed "saved" the system, but there is no free lunch...

sonny

July 30, 2024 - 10:47 am

@Bob: Check out this Bloomberg AJ video on Tech storage companies: http://www.bloomberg.com/video/signs-of-slowdown-tech-s-week-of-weakness-whBMKz08Se~cS8gkUyBgSw.html

jeffmiller

July 30, 2024 - 10:59 am

@sonny: While forming your opinion, you might want to consider the daily trading volume in treasuries. Do you know what it is? Most "experts" do not. This is why Bill Gross was so wrong in asking who would buy US bonds after QE ended.

sonny

July 30, 2024 - 11:24 am

@Jeff: I dont get your point. But I heard China now has a direct link to the Treasury that they can buy US bonds directly. So daily trading volume on treasuries may not mean much. Plus, I assume most of trading on treasuries are off-exchange, no?

robert

July 30, 2024 - 12:05 pm

mega caps outperformance now fully established. that's usually the last thing that happend in a bull market. expecting the market to set a top this week. also expecting the fed to disappoint the free market hypoctites who are begging for more qe. dont just sit there, sell freakin something. sell is a four lettered word....wait i did those.

robert

July 30, 2024 - 12:08 pm

market is no where near cheap. SnP500 around 15x's earings. real gaap earnings. on all time record profit margins. defensive stocks like ko, vz, wmt, and pg are leading the way at 16-18x's 2012 ests. most of the defensive stocks have low single digit revenue growth and little margin expansion potential from record margins. like tbonds, defense is expensive and not too defensive. raising cash a better idea.

robert

July 30, 2024 - 12:11 pm

rarely has a bull market thrived from a mentality thata things are so bad the fed will qe and the mega cap stocks should trade up to high valautions because a 2.5% dividend is better than a 1.5% treasury. i sense the same arrogance and complacency investors had in the spring at SnP 1400. this time could be different, as always, but we need the risk on stocks to drive the rally forward if it is to continue.

kim

July 30, 2024 - 12:18 pm

bob- you certainly are 'debbie downer' but I totally see your points!

jeffmiller

July 30, 2024 - 12:30 pm

@sonny: The reason to care about the volume of bond trading is that it directly addresses your point. Can the Fed unwind its balance sheet in an orderly fashion. Since daily volume is over $500 billion, (and that does not count futures at the CBOT) the answer is pretty obvious.

jeffmiller

July 30, 2024 - 12:33 pm

Treasury volumes reported at http://www.sifma.org/

sonny

July 30, 2024 - 12:40 pm

@Jeff: Got it. Thanks.

robert

July 30, 2024 - 12:48 pm

kim, we will see soon enough. dallas fed a big downer. market ignoring deteriorating macro as thought it wont be fooled again. for the recessionistas and bears, the third time just might be a charm. if the global economy starts to reaccelerate, i will be incorrect. but i just dont see the sources of growth out there. this quarter we seem to be getting about 2% revenue growth from the SnP. the next quarter seems just as slow. the mo-mos are all bulled up, but i dont see the catalyst for another material leg up. its gonna be an interesting fall.

jay

July 30, 2024 - 12:54 pm

Bob care to explains the AAII data that showed less than 30% of those survey were bullish??

sonny

July 30, 2024 - 12:56 pm

@Bob: STX earning report tomorrow. Any comment? Do you have a sell/target price in mind?

kim

July 30, 2024 - 1:07 pm

bob, i agree with you. but i also see bullish technical points, which really dont mean much if there isnt anything (growth or $) to propel the markets forward/upward. it's a tough place to be in, clients are very discouraged with the market.

robert

July 30, 2024 - 1:20 pm

jay, give em another week. sonny, i think stx should make a lot of money if wdc makes $10 eps in the next 12 months. more importantly, they could and should double the dividend to $2 per share. a 4% -5% yield would get the stock to $40-50. kim, charts is charts. no one i know can call their reversal perfectly, including me. just a month ago mcd and sbux were good charts and now look at them. i would prefer to see more bulls out there guys, but the same thing happened in 2008 with sentiment.

robert

July 30, 2024 - 1:27 pm

election year seasonality is very positive for august. i would not be surprised to see an overshoot on my 1400, end of july target by a week or two. investors do not discount any more. and they may chase the fed/rally. but by the middle to end of this month i expect to have less long exposure than now. enjoyed the ride back up, but not counting on it to last past this month. autumn should be a challenge. imho

Mitchm

July 30, 2024 - 1:31 pm

And Spanish Bank Stress tests on Aug 15...See if we get a real number on the amount of capital needed there...may be a catalyst....

Mitchm

July 30, 2024 - 1:33 pm

for correction...

giorgio

July 30, 2024 - 1:47 pm

I dont think so. I dont think they are very strict with the variables in the test.

sonny

July 30, 2024 - 4:05 pm

STX earning $2.41 vs. $2.53, rev $4.48B vs. $4.55B, a small miss.

sonny

July 30, 2024 - 4:48 pm

@Bob: why STX missed even already lowered earning and revenue estimates?

robert

July 30, 2024 - 7:39 pm

looks like wdc took some market share. both companies guided very conservatively imho. another big dividend increase with more coming.

tendency

July 30, 2024 - 7:52 pm

dumped my gold that'll be screwed to in the next correction 100% cash and sitting

tendency

July 30, 2024 - 7:53 pm

around here or so probably a good time to start selling if you're worried about the next EU b@tchsl@p no?

sonny

July 31, 2024 - 9:23 am

@Bob: STX guidance is very weak This will affect INTC and MSFT eventually. It feels like Fall's PC sale will not be that strong. It could also mean cloud/storage build-out be slowed down later.

robert

July 31, 2024 - 11:23 am

so listening to bubblevision today, it's clear the talking heads are attempting to bully the fed into a material qe program. the arguement is that this rally is all about qe so the fed must do it or else. do ahead ben, dont debase the currency and suffer the awful consequences of a stock market pullback. the knuckleheads at the fed, who have missed every bubble in the past 13 years should not oblige.

robert

July 31, 2024 - 11:29 am

qe does not create jobs or sustainable wealth. it does not foster innovation or invention or savings and investment. it solves none of the structural imbalances that plague the economy. it will pop stocks and commodities, at least temporarily. and it will foster more business combinations and redundant employees. it will spike oil prices on top of the food price spike we are experiencing from the drought. and it will permit politicians to avoid making serious progress on the structural debt, deficit, and entitlement imbalances for some time. all in all qe is a dud. but the bernak, in love with manipulating equity maket prices is chomping at the bit to give speculators what the demand. more juice for a rally.

robert

July 31, 2024 - 11:31 am

we dont need this juice. we have corporations beating the sh*t out of households on a daily basis from employment cost reductions and productivity requirements. this has led to record profits, record free cash flow, record dividends, and record share repurchases. owners of capital and large businesses have been taken very well care of the past few years. it small biz and households that have been screwd, and qe doesnt really help them.

robert

July 31, 2024 - 11:36 am

so i humbly suggest, to the guys who oversaw the creation of the tech bubble, the housing bubble and the debt bubble to save some qe bullets for when the market and economy really needs them. figure something out for once fellas. we have a delevering that will last a decade, and a few more crises are baked in the cake. if day traders and computer algos can bully the fed into qe in order to preserve a rally close to new highs for stocks, imagine how nasty things will get when we really need intervention but cant afford it.

tendency

July 31, 2024 - 12:35 pm

robert - you like AAPL here w/ the supposed iphone 5 launch imminent?

sonny

July 31, 2024 - 12:35 pm

@Bob: well said. But what if the next QE stop working? That can be deadly for the Fed.

scott

July 31, 2024 - 12:37 pm

@robert: just get rid of CDS. That is the one common thread with all the problems we have had.

scott

July 31, 2024 - 12:37 pm

CDS add no value to society

robert

July 31, 2024 - 1:43 pm

scott, i totally agree re cds. will be a disaster. sonny, thats true. every qe round produces less benfits. no need to overuse it. tendency, no clue re apple. not my style. low p/e, but i dont understand current profit margins vs normal. cody, there's always the reverse split.

sonny

July 31, 2024 - 3:07 pm

@Bob: At this rate, FB will go to $1 by end of next month. Do you worry they running out of money to buy more HDD from STX? Just kidding....

jay

July 31, 2024 - 3:08 pm

lol sonny

sonny

July 31, 2024 - 4:16 pm

@Bob: Any comments on Bill Gross's latest letter? Big corporations and the 1% win, everyone else lose? He says many same things you said.

robert

July 31, 2024 - 6:17 pm

yup, we have similar views. financial repression from central bankers forever. challenged economy forever. secular bear market in shares to continue, tho one can trade the range. long bond a disaster eventually. much higher inflation down the road as well.

robert

August 1, 2024 - 2:22 pm

no fed action which was proper call. all free market hypocrites on bloomberg and cnbc begging for QE what a joke. economic news mixed. jobs report and personal income numbers good. some foreign pmi data soft. qe is a crisis policy, not a buffer for underperforming equity managers.

jeffmiller

August 1, 2024 - 2:29 pm

As Bob notes, the Fed sees a mixed picture. The announced policies are very marginal in impact. Upcoming employment data wll be important. The next policy move may not be a QE type action.

jeffmiller

August 1, 2024 - 2:41 pm

The Bonddad Blog has a nice update on the economic series most important for determining recessions. There is a careful analysis of the ever-changing tune from the ECRI -- definitely worth a read. http://bonddad.blogspot.com/2012/08/no-recession-by-midyear-2012.html

jay

August 1, 2024 - 2:42 pm

thanks Jeff

jeffmiller

August 1, 2024 - 2:51 pm

Figuring out what is baked into the market is a guessing game that everyone can play. Most were probably not expecting a QE announcement today, but some were. From the market reaction, not too many were caught offsides.

robert

August 1, 2024 - 3:15 pm

i think some euro qe is in the amrket from mr take-my-word-for-it draghi. and it think the equity markets will trade risk off if nothing meaningful happens.

robert

August 1, 2024 - 3:17 pm

imho, 150,000 jobs on friday is too blah to be good or bad. and it removes the qe imperative for the fed but doesnt assure growth either. a number like that is better for the bear case than the bull one.

jeffmiller

August 1, 2024 - 3:22 pm

@robert: I agree re: Draghi and market expectations.

scott

August 2, 2024 - 10:31 am

Please make sure you read Jeff Miller's excellent preview of the monthly labor report due out tomorrow https://wallstreetallstars.com/july-employment-report-preview/

robert

August 2, 2024 - 10:49 am

jeff, cut to the chase. whats your model's number?

Mitchm

August 2, 2024 - 11:02 am

That was my question after reading it...LOL...

jeffmiller

August 2, 2024 - 11:12 am

@robert: Well, I could just remove the discussion of my model! It worked very well for a number of years, but last year's debt ceiling brinksmanship had a huge effect on consumer confidence, which has never really rebounded.

jeffmiller

August 2, 2024 - 11:15 am

Some of the modelers go mostly from initial claims, but that only gets job cuts. You need something to get at the creation of new jobs. I don't publish the model estimate since it does not seem to be meaningful right now.

jeffmiller

August 2, 2024 - 11:16 am

Having said this, I will share a couple of additional ideas with our group. Even if I plug in a higher level of consumer confidence, the job growth is significantly weaker than expectations.

jeffmiller

August 2, 2024 - 11:20 am

And since I wrote the article last night, the BLS has released the actual data for Q4 2011. No one cares after such a long time, but they should. It shows that net private employment growth for the quarter was only 368,000 jobs. The BLS data (not yet revised to account for this) showed gains of about 551,000. http://www.bls.gov/news.release/cewbd.nr0.htm

jeffmiller

August 2, 2024 - 11:21 am

ADP shows gains of 710,000 for that period, but their data will also have a "benchmark revision."

robert

August 2, 2024 - 11:21 am

euro-drivel continues. -take-my-word-for-it will not suffice. risk off is now on. as i wrote, my template has a grudging correction/bear market thru year end. i remain cautious on stocks. with slowing macro and rising fat tail risk, read financial crisis, it seems that profit taking and raising cash makes sense.

sonny

August 2, 2024 - 12:15 pm

@Bob: I don't think the US stock market will go down much from here. First the sentiment is so bearish, everyone seems to worry about Euro & China. Second, Fed's QE threat will limit the downside as traders are convinced that Ben will act if SPX going below 1200. Third, so much money has left the stock market since 2008, there is not many real sellers left. The market cannot be at the top when the headlines are this negative.

robert

August 2, 2024 - 2:03 pm

sonny, dont underestimate the power of fear. stocks being held up by the risk off mo-mo names. just a month ago starbucks was a leader there. look at chart now. once profit taking hits these defensive momo names, watch out below.

robert

August 2, 2024 - 2:11 pm

thanks jeff! at 100k, the market should not move either way. at big shortfall, i guess we have downside pressure mitigated by fed hopes.

Mitchm

August 2, 2024 - 2:47 pm

@jeffmiller: Will those benchmark revisions happen tomorrow or at later date? Thanks!

sonny

August 2, 2024 - 2:50 pm

@Bob: Earning yield on S&P is about 7% this year. 10-yr bond yield is at 1.5%. This is why stocks are not too expensive compared with bonds. I'd rather short bonds than stocks.

jeffmiller

August 2, 2024 - 3:03 pm

@Mitchm: The BLS releases preliminary benchmark revisions in October and implements them in January. The report I cited, The Quarterly Census of Employment and Wages, is a good estimate of the changes and is available on a somewhat more timely basis.

Mitchm

August 2, 2024 - 3:13 pm

tks Jeff good work!...when in October?

jeffmiller

August 2, 2024 - 3:28 pm

@Mitchm: It is usually the first week or so in October, and sometimes late September. Since it is backward looking, it is usually just a source for comment, showing the aggregate discrepancy in the monthly surveys and the actual count from states.

Mitchm

August 2, 2024 - 3:38 pm

Election fodder possible...

jeffmiller

August 2, 2024 - 3:47 pm

How Obama gets the news -- if only we knew who was carrying the message.....http://go.bloomberg.com/political-capital/2012-08-02/fist-bump-or-moment-of-silence-how-the-jobs-news-is-delivered/

Strange-Currencies

August 3, 2024 - 10:00 am

@All: What the heck is happening to the European indices today? Shorts getting squeezed?

jay

August 3, 2024 - 10:35 am

SC, pretty much what I have been ssaying..markets across the pond and here Stateside were hoping for ECB/Fed action but not necessarily trading on that hope..simple as that IMO

jeffmiller

August 3, 2024 - 10:50 am

@Strange-Currencies: There are more stories on Draghi and developing plans. Draghi's "contingent commitment" may not have spelled out specifics, but some now see the wisdom in forcing sovereigns to have supervised commitments, which the ECB cannot do on its own.

jeffmiller

August 3, 2024 - 10:51 am

This is forcing Spain to make formal application for help, which reports say is already happening -- hardball bargaining.

scott

August 3, 2024 - 11:19 am

@jeffmiller: Head and shoulders Draighi is better than Jean the Clod Trichet

sonny

August 3, 2024 - 12:54 pm

@Jeff: more and more baby boomers are retiring. Can labor participation rate go any lower?

jeffmiller

August 3, 2024 - 1:10 pm

Others lose jobs and find that they cannot effectively retrain. They may not find it effective to take lesser jobs. On balance, the participation rate was expected to go lower, but perhaps not as low as it has.

jeffmiller

August 3, 2024 - 1:12 pm

@sonny: first part of response got lost --- I noted that it cuts both ways. Some boomers have found it necessary to extend their working years and/or consult.

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