Apple (AAPL) has certainly been doing its part to help buoy the index, and this morning AAPL investors got more good news in the form of a dividend and a share buyback. AAPL said it will institute a $2.65 quarterly dividend and commence a $10 billion share buyback. This will likely not put much of a dent in the growing cash hoard at Apple, but it is nice they are giving some back to shareholders.
The dividend is also likely to attract some value-type investors who have mandates that they can only hold dividend paying stocks. At $2.65 a quarter, the dividend yield would be about 1.8% at current levels.
Outside of that it is a lackluster Monday morning in terms of corporate newsflow.
Asian markets were mixed overnight, and Europe was a bit weak this morning. The dollar is up a little vs. the euro, and commodities are mixed as well. Oil prices are higher at $107.66 but natural gas prices are lower. Gold prices are higher to $1657 but silver prices are lower.
The 10-year yield is hanging on to last week's big spike higher and hovering around 2.31%. And the VIX is up 3% this morning to 14.95, still at 1-year lows.
Trading comment: Lots of fixed income vehicles, from ETFs to closed-end funds, saw sharp selloffs last week. This was likely a knee-jerk reaction to the spike higher in yields, but if this turns out similar to recent selloffs in fixed income funds it will just be another correction and nothing more. If these funds don't rally again and begin to show more long-term topping formations, that would be a stronger signal that the rotation out of the safety trade of bonds and into equities has some legs to it. Time will tell.
KAM Advisors has long positions in AAPL, VXX
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