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The Top Companies Cutting Dividends So Far

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The Top Companies Cutting Dividends So Far

April has been a rough money for dividends.

With the U.S. economy crumbling under the weight of the virus and decimated oil prices, companies are moving to preserve cash by cutting dividends.  “Dividend pain has just begun,” analyst Charles Toole of Adviser Investments said, as quoted by CNBC.

General Motors (GM) for example just cut its quarterly cash dividend and its share buyback program.  All as the virus does severe damage to global auto sales.  “We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” said GM Chief Financial Officer Dhivya Suryadevara, as quoted by Reuters.



There are rumblings that Exxon Mobil (XOM) may be forced to cuts its dividend, too.  

Ford Motor (F) cut its dividend, which could save the company about $2.4 billion annually, notes The Wall Street Journal.  Carnival (CCL) cut its dividend and cut capital expenditures and operating expenses, as noted by Barron’s.  

Estee Lauder (EL) cut executive salaries, suspended dividends, issued notes and borrowedd the full amount under its $1.5 billion revolving credit facility, as the cosmetics giant reacts to the coronavirus pandemic, says The Street.

Hilton Worldwide (HLT) suspended its dividends and buybacks, too.  Hilton explained that “[w]ith travel at a virtual standstill, operations have been suspended across many managed and franchised hotels, and those hotels that remain open have reduced services for guests because of decreased occupancy levels.”

Unfortunately, this may only be the start of a long list of recent cuts.

Arch Coal just cut its 50-cent dividend.  Expedia halted its 34-cent dividend.  Quest Diagnostics just suspended its buyback program.  Las Vegas Sands cut its dividend of 79 cents.  ConocoPhillips suspended its buyback program.  Columbia Sportswear cut its 10-cent dividend.

Those are only a few. We could even see Exxon Mobil cut its dividends, too. 



Road to Recovery: Stock Hotlist for The Week of April 27th, 2020

Road to Recovery: Stock Hotlist for The Week of April 27th, 2020

Hope you’re enjoying the weekend.

Oil was a major catalyst over the last week.  After diving well into negative territory on a severe lack of demand, and far too much supply, oil began to pivot higher.

However, it’s not time to rush back into oil just yet.

The only reason oil is ticking higher is because of hope for further production cuts, and President Trump’s threat to Iran in the Persian Gulf.  Other than that, there are no real reasons to get excited about an oil price recovery.  For one, demand will not return any time soon thanks to the coronavirus, and two, there’s so much supply we’ve run out of places to store it.

One analyst says oil could plunge to negative $100.  “Oil is difficult to handle and if you can’t put it anywhere, it becomes an environmental liability literally. So, over this next month storage is now effectively full, you could see some extreme negatives in terms of prices offered,” Paul Sankey, managing director at Mizuho Group, told Yahoo Finance.

While we hope it doesn’t come to that, far too much supply could make it a possibility.

As we wait to see what happens next in the markets, here’s what is piquing our interest.  

Opportunity No. 1 – BioNTech (BNTX)



BioNTech and Pfizer just secured approval to conduct human clinical trials of a possible coronavirus vaccine in Germany. According to Bloomberg, “Regulators gave the green light to test the companies’ proposed vaccine on 200 healthy people aged 18 to 55 years in a first stage, and on additional high-risk candidates in a second stage.”

The two expect to win approval for testing in the U.S. shortly. “It’s a good sign that the development of vaccines in Germany is at a stage at which we can begin with the first trials,” Health Minister Jens Spahn said, as also quoted by Bloomberg. “At the same time, it’s important to remember that it will take months before a vaccine will be fully tested and can actually be available.”

Opportunity No. 2 – Alpha Pro Tech (APT)

Alpha Pro Tech has been ticking higher on face mask demand.  With the U.S. CDC advising that everyone should wear a face mask in public, face masks are under considerable demand.  There’s just one problem. There’s been a severe shortage. 

As a result, APT is seeing sizable demand for product.  “As of April 7, 2020, APT has booked approximately $36.7 million in orders for the company’s proprietary N-95 Particulate Respirator face mask since January 27, 2020, an increase of $14.1 million, or 62%, from the $22.6 million in orders reported as of March 11, 2020, and the company continues to experience greater demand. APT has seen exponential increases not only in near-term demand, but also in longer-term ongoing purchase orders that have request dates that extend beyond the third quarter of 2020 and into the first half of 2021.”

Opportunity No. 3 – Moderna Inc. (MRNA)

Just last week, we highlighted MRNA as an opportunity, as it traded at just $44.76.  it’s now up to $49.45, and exploding higher as it moves forward with COVID-19 vaccine plans.  It was recently awarded an $843 million U.S. award to develop a vaccine, and hopes to have safety data from Phase 1 trials shortly.  



After the Apocalypse: How We’ll Make Money in the Post-Pandemic World

After the Apocalypse: How We’ll Make Money in the Post-Pandemic World

The novel coronavirus isn’t “novel” anymore.

It’s everywhere.

And it’s disrupting how we live, how we work, and how we invest.

Huge paradigm shifts are already underway.

Here’s how life as we know it is changing…

The Reaction to COVID-19’s Origin and Spread

The origin of the novel coronavirus is unknown – at least officially. But that hasn’t stopped speculation about whether the virus manifested itself naturally – perhaps originating in bats, got passed to an intermediate animal host, and morphed or became zoonotic and able to infect humans – or whether it is a manmade virus.

If it is zoonotic in origin, the world will still want to know where and how it happened – and how to prevent naturally occurring future virus mutations.

If its origin is manmade – whether it was being engineered as a SARS vaccine, or as an HIV-attached bioweapon – we need to know.

It matters.

When the truth is discovered, or the most plausible scenario gets mapped out, countries are going to react. The nature of global relations will change.

Even if the virus is a bad vaccine that accidentally escaped a biolab, the fact that its origin and lethality were covered up will change how countries interact and trade with each other.

Governments and companies are going to reassess supply chains and access to essential and strategic goods and services. Global production, even in countries that have a comparative advantage in labor costs and raw materials, will be reconsidered in favor of more “local” production.

If the virus is determined to be an engineered bioweapon, we’ll see the rise of nationalism, of xenophobia, and some overt saber-rattling.

In either case, the outcome will change where capital will be allocated and where and what to invest in.

What Shutdowns Have Changed



The shutdown of cities, states, and countries has changed everyone’s experience and appreciation of what’s necessary and what’s superfluous.

What’s necessary is access to goods and services and the ability to learn, live, work, and earn – remotely.

In any shutdown, we’re talking about Internet access, connectivity speed, cloud services, security software, remote tools (including video and interactive services), contract execution facilities, and probably also everything blockchain.

Digital education and entertainment are “must haves.”

What’s not so necessary anymore are huge investments in offices, brick-and-mortar retail and other forms of commercial real estate – or extravagant college campuses.

The process of determining what’s necessary and what’s not so necessary is upending lives and businesses. It’s winding down old investment themes and generating new ones.

The already precipitous decline in brick-and-mortar retailing is being accelerated by the agglomeration of e-commerce.

Agglomeration economics will result in e-commerce oligopolies.

With Amazon heading the charge, the world economy is already headed that way.

The digital rich are going to get richer. And new, single-purpose and multi-function digital vertical silos will rise up to join the likes of Alphabet Inc. (NASDAQ: GOOGL), Facebook Inc. (NASDAQ: FB), Apple Inc. (NASDAQ: AAPL), Netflix Inc. (NASDAQ: NFLX), and Microsoft Corp. (NASDAQ: MSFT).

Commercial real estate will be rethought and reinvented.

Companies have already discovered they don’t and won’t need offices for the bulk of their white-collar workers. Co-working space – based on short-term leases or daily rentals – will become more popular.

Office buildings will have to be converted into residential buildings.

That shift will start a year after the shutdown ends – or as soon as commercial leases allow.

Small, permanent retail stores will mostly disappear in malls. In the shopping centers that survive, seasonal retailers and pop-ups will replace long-term tenants, who, if they stay, will have to guarantee or accept profit-sharing leases.

Single-use buildings will have to become multipurpose spaces, making way for convergence-hybridization models that offer retail goods and services, dining, and warehousing – while also serving as distribution and delivery hubs.

Employment and Unemployment Shifts

In the pandemic’s aftermath – as companies adjust their business models and modernize their service and production lines – there will be fewer good-paying jobs and fewer jobs in general, especially in the hospitality, travel, and leisure segments of the economy.

And younger workers will battle it out with older workers for those jobs.

Workforce automation is already reducing the number of entry-level, labor-intensive, repetitive-task and specific-skills jobs. As the shutdown and ensuing recession brings about a corporate-revenue decline – at the same time that competition and agglomeration increase – labor savings are going to be more important.

As sales become more digital and workers become more “expensive” in terms of increasing healthcare costs, unemployment benefit costs, paid sick/vacation leave, and childcare costs creating more “liabilities,” the company swap-out of workers for automation will accelerate.

Young people entering the work force and looking for different jobs and older workers – including the “grey tsunami” of retirement-age workers who aren’t going to be able to retire – will increasingly compete for the diminishing number of entry-level and low-level jobs.

A Seismic Shift



As layoffs increase now – and as businesses are disrupted by the virus-driven seismic shifts in the economy – the number of the “underemployed” and unemployed Americans will spiral.

Unemployment benefits are already changing to accommodate millions of the newly unemployed. Some changes will likely have to become permanent.

The United States may be on its way to providing some form of “basic income” – by necessity, not by choice.

While the idea of basic income – or free college, or a Green New Deal – seemed impossible, if not ridiculous, only a few months ago, it’s all possible now.

If the U.S. Federal Reserve can finance trillions of dollars of rescue money to support private-sector businesses – including big banks and airlines that buy back their shares to enrich management and shareholders (albeit temporarily, it turns out) – surely central bankers can finance social services and giveaways that less than two months ago were crazy political promises.

Paradigm shifts wrought by the novel coronavirus will change how we live, work, and invest.

And these changes will be forever.

For investors with the capital to wager on the future, the paradigm shifts before us present truly extraordinary moneymaking opportunities.

I’ll be back soon with an industry that won’t survive and a way you can cash in on its downfall.



Two Big Reasons Why COVID-19 Is Being Called the Wuhan Virus

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Two Big Reasons Why COVID-19 Is Being Called the Wuhan Virus

Just because the World Health Organization officially named the disease caused by the novel coronavirus COVID-19, that doesn’t mean it’s not going to be referred to as the Wuhan virus, the Chinese coronavirus, or other names that stamp the origin of the virus into the public lexicon.

One reason for what some observers see as politically incorrect name-calling is, in fact, pure politics.

The President of the United States, some members of his administration, and other politicians are stamping “Made in China” all over the virus because identifying China as the virus’s place of origin stigmatizes China geopolitically, with the intention of undermining China’s increasing global influence.

Another reason the world’s going to be hearing more about the Wuhan or Chinese virus is that lawsuits are being filed blaming China for accidental or deliberate gross economic destruction.

A $20 trillion class-action suit filed in the U.S. District Court for the Northern District of Texas alleges the virus that causes COVID-19 is a biological weapon designed by China, and that by releasing it, China violated U.S. law, international laws, treaties, and norms and caused massive economic damage to U.S. individuals and businesses.

Here’s why in politics and law, sometimes names matter…



Coronavirus Origin Story

In 2015, the World Health Organization (WHO) issued new guidelines for naming new infectious diseases in humans. According to the WHO, they are meant to “minimize unnecessary negative effects on nations, economies, and people,” and should consist of generic terms that describe the disease’s symptoms, or, if the pathogen that causes the disease is known, it should be part of the disease name.

On Feb. 11, 2020, the WHO officially named the recently identified novel coronavirus “COVID-19.” CO stands for corona, VI for virus, D for disease, and 19 for 2019, the year it was discovered.

What the WHO did not do was sound a global alarm when Chinese health officials alerted them on December 31, 2019 of a cluster of patients in Wuhan, a city of 11 million in Hubei province, exhibiting unusual pneumonia-like symptoms.

Perhaps the WHO wasn’t aware or didn’t demand more information from Chinese health officials who already knew what has subsequently been revealed.

According to official reports, on Dec. 10, 2019, a 57-year-old man who worked at the Huanan Seafood Wholesale Market in Wuhan, specifically in the wet market, started feeling ill. A wet market, as opposed to a market for dry goods, is a public marketplace where produce, fish, meat, and live animals are sold and slaughtered.

The man was then admitted on Dec. 16, 2019, to Wuhan Central Hospital with a “flu-like infection” in both lungs, and was treated with anti-flu drugs that the virus proved resistant to.

What the WHO may not have known, which the world knows now thanks to a report accessed by The South China Morning Post and corroborated by The Wall Street JournalThe Washington PostAXIOS, and other sources, is that a 55-year-old man, later confirmed to have had coronavirus, likely contracted it on or around Nov. 17, 2019.

He started exhibiting symptoms on Dec. 1, 2019, had not been to the wet market, and though he is considered the earliest traceable patient, Chinese officials say there was no epidemiological link between his case and later cases.

The WHO may not have known a 51-year-old doctor in Dongguan, an industrial city in China’s Pearl River Delta, was hospitalized on Dec. 2, 2019; the first known hospitalization caused by the “pneumonia with unknown etiology.” He was diagnosed with a lung infection, severe pneumonia, acute respiratory distress syndrome, and allergic purpura. Not surprisingly, according to subsequent Chinese reports, no epidemiological link could be found between his case and later cases.

As patients presented symptoms at Wuhan area hospitals, between the 18th and 29th of December, bronchoalveolar lavage fluid (BAL) was collected and used for viral genome sequencing. During that period, members of the Wuhan Institute of Virology published a report on seven cases of people with severe pneumonia who were admitted to the intensive care unit of the Wuhan Jin Yin-Tan Hospital.



Their samples were sent to the laboratory at the Wuhan Institute of Virology for the diagnosis of the causative pathogen. Patient ICU-01 was not proven to be linked to the Wuhan Seafood Market, but the other six were either sellers or deliverymen at the market.

Meanwhile, on Dec. 24, 2019, doctors from Central Hospital of Wuhan took fluid samples from the lungs of a 65-year-old deliveryman who worked at the Wuhan seafood market and sent them to Vision Medicals in Guangzhou for testing.

Visual Medicals, a Chinese infectious disease startup founded in May 2018 that focuses on precision medicine for infectious diseases, including respiratory and bloodstream infections, had developed a CRISPR-based rapid diagnostics platform for pathogen detection, and said it sequenced most of the virus from fluid samples on Dec. 27. The results showed an alarming similarity to the deadly SARS coronavirus that occurred between 2002 and 2003.

After receiving the test results, multiple doctors in Wuhan shared the information via Internet, including Li Wenliang, an ophthalmologist at Wuhan Central Hospital, who posted a warning to alumni from his medical school class via a WeChat group that a cluster of seven patients treating within the ophthalmology department had been unsuccessfully treated for symptoms of viral pneumonia and diagnosed with SARS.

In the WeChat post, Li posted the hospital had confirmed cases of SARS and posted a snippet of an RNA analysis finding “SARS coronavirus” and extensive bacteria colonies in a patient’s airways.

Li, called in for questioning and detained by authorities, contracted the coronavirus from a patient he treated, was hospitalized on Jan. 12, 2020, and died on Feb. 7, 2020.

News of an outbreak of “pneumonia of unknown origin” started circulating on social media on the evening of Dec. 30, 2019. The social media reports stated that 27 patients in Wuhan – most of them stall holders at the Huanan Seafood Market – had been treated for the mystery illness.

During the following two days, Dec. 28 and 29, 2019, Hubei Provincial hospital received three similar cases, all associated with the seafood market. On Dec. 29, hospital administrators convened a multi-departmental panel of doctors who concluded the cases were unusual and required special attention. They reported their findings to the provincial CCDC, Chinese Centers for Disease Control, not affiliated with the U.S. CDC.

Wuhan CDC staff initiated a field investigation and found additional patients with similar symptoms who were linked to the market. According to a CCDC publication, the initial admissions to Hubei Provincial Hospital occurred on Dec. 29.

On Dec. 30, 2019, an “urgent notice on the treatment of pneumonia of unknown cause” was issued by the Wuhan Municipal Health Committee on its Weibo social media account. The post said there had been “a successive series of patients with unexplained pneumonia recently” – 27 suspected cases in total, seven of which were in critical condition and 18 were stable, two of which were on the verge of being discharged.



On Dec. 31, 2019, the Wuhan Municipal Health Committee reported to the WHO that 27 people had been diagnosed with “pneumonia of unknown cause.”

The Wuhan Municipal Health Commission also made a public announcement regarding the outbreak.

On Jan. 5, 2020, Professor Zhang Yongzhen and his team at the Shanghai Public Health Clinical Center announced they had mapped the world’s first genome sequence of the deadly novel coronavirus.

The Shanghai Center reported its discovery to the National Health Commission on the same day and recommended “relevant prevention and control measures be taken in public places, because the patient from whom the sample was collected had suffered very severe symptoms and the virus resembled a group previously found in bats.”

China’s National Health Commission announced hours after the release by Zhang’s team that it would share the genome sequence with the World Health Organization. It later emerged that the information had been sent through the officially designated Wuhan Institute of Virology.

At the time, the public was told that no new cases had been reported in Wuhan since Jan. 3 and there was no clear evidence of human-to-human transmission.

According to The South China Morning Post, Professor Zhang’s team “made their finding public on Jan. 11, after it saw that the authorities had taken no obvious action to warn the public about the coronavirus.” The Center shared its genome data on virological.org, an open platform for discussions, and GenBank, an open-access data repository, and said researchers were welcome to download, share, use, and analyze the data.

A day after Shanghai Public Health Clinical Center published the world’s first genome of the virus, it was ordered to close for “rectification.” It closed the following day.

The findings by Zhang’s team were published in the scientific journal Nature on Feb. 3. The research said the virus sample was collected from a patient who showed symptoms of fever, dizziness, and coughing and was admitted to a Wuhan hospital on Dec. 26.

Subsequently, researchers led by Dr. Wang Jianwei at the Chinese Academy of Medical Sciences, Institute of Pathogen Biology, used next generation sequencing (NGS) to definitively identify the pathogen causing illness in Wuhan. They focused on five patients admitted to Jin Yin-tan Hospital in Wuhan, most of whom were workers in the Huanan Seafood Market in Wuhan.

The researchers constructed the whole genomic sequence of the new virus and found that its genome sequence is 79% similar to the SARS-CoV, about 51.8% similar to the MERS-CoV, and about 87.6-87.7% similar to other SARS-like CoVs from Chinese horseshoe bats (called ZC45 and ZXC21).

Understandably, the late Dr. Li Wenliang misdiagnosed the novel coronavirus as SARS, given the remarkably close RNA structure the COVID-19 virus has to SARS.

The WHO then declared COVID-19 a pandemic on March 11, 2020.

Seeking Political and Legal High Ground



Since the virus is almost indisputably from somewhere in China, probably the Wuhan wet market, maybe the Wuhan Institute of Virology, and Chinese health officials, authorities, and politicians more than likely all the way up to the President Xi Jinping, knew about the exploding epidemic and covered it up for as long as they could, they’ve put themselves and the country in the line of fire both politically and legally.

Politically, the Chinese are vulnerable on all fronts.

Domestically, as more Chinese citizens question what the government knew and didn’t tell them, the ruling party will be disparaged and possibly challenged if further pain is inflicted on the Chinese population.

Internationally, China faces mounting criticism that will only grow exponentially louder once the crisis passes and health concerns are superseded by political and economic concerns.

Legally, the $20 trillion class-action lawsuit filed in Texas was only the first such suit. Already, another suit has been filed in federal court in Florida, and lawsuits are being filed in other countries.

So, get used to COVID-19 being called the Wuhan or Chinese virus, because those names have a political and legal ring to them that will be reverberating for some time.



This is Why Investors Should Not Trust the Oil Rally

This is Why Investors Should Not Trust the Oil Rally

For the first time in history, oil prices went negative.

All thanks to a severe lack of demand, and far too much supply.  Not even OPEC’s production cut of 10 million barrels a day could stop the decline.

However, we are seeing a slight recovery in oil.  We just have to question how long it can last.  After all, until the coronavirus threat is over, we still won’t see much demand.  On top of that, there’s still far too much supply with no room to store it.

At the same time, OPEC may be hinting at further cuts.

“Majid bin Abdullah Al-Qasabi pointed out that the Cabinet discussed the Kingdom’s keenness to achieve stability in the oil market, its affirmation with the Russian Federation of a firm commitment to implement agreed targeted cuts over the next two years, their continuing monitoring of oil market situations closely, and being prepared to take further measures jointly with OPEC+ and other producers,” as highlighted by Oil Price.

Unfortunately, as we’ve seen with OPEC in recent weeks, action is too little, too late.

Threats to Iran Driving Oil Higher



At the same time, oil is running higher on Iranian threats from President Trump. 

“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” he tweeted.  

This threat comes just days after Iranian vessels were operating very close to U.S. ships in the Persian Gulf.  Iran fired back, with The Hill noting, “Iran’s Islamic Revolutionary Guards Corps (IRGC) acknowledged the encounter on Sunday but claimed without evidence that American forces triggered the incident, accusing the U.S. of ‘unprofessional and provocative actions.’”

While it’s a wait and see at this point, it won’t be enough to keep oil prices higher.

Unfortunately, transportation of all forms is set to plunge, says Forbes, as millions of Americans work from home, and are unlikely to take vacations until the virus threat is gone.  On top of that, oil travel demand has dropped considerably.  “According to the U.S. Transportation Security Administration, passenger screenings at airports have dropped by roughly 95% in the month of April, compared to early March,” they note.

In short, while oil may be rising today on OPEC hopes, and threats to Iran, oil could fall more.