Unexpectedly Intriguing!
February 2, 2015

Mainly for the sake of taking a snapshot in time, here is an update of our chart showing the major trend that has existed in the U.S. stock market since 4 August 2011.

S&P 500 Index Value vs Trailing Year Dividends per Share, 
30 June 2011 Through Present (30 January 2015)

Keeping in mind that we're well aware that stock prices do not follow any sort of normal distribution for extended periods of time (and technically, what we're showing is really a kind of lognormal distribution!), how long do you think the current period of "normality" might continue to last for the U.S. stock market?

The big question going into February 2015 is how long can energy companies with falling revenues as a result of falling oil prices continue to support paying their dividends at the levels they've previously indicated by either borrowing (in effect, betting that oil prices and their revenues will adequately recover within a relatively short period of time) or by cutting their spending as much as possible to preserve their profitability/existence?

The danger for the stock market lies in whether these companies, which have largely powered the economic recovery in the U.S., will be forced to either stall out the growth of their dividends or to cut them outright. Either of these scenarios could cause the existing state of order in the stock market to break down.


Labels:

About Political Calculations



blog advertising
is good for you

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Applications

This year, we'll be experimenting with a number of apps to bring more of a current events focus to Political Calculations - we're test driving the app(s) below!

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

Visitors since December 6, 2004:

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links
Charities We Support
Recommended Reading
Recommended Viewing
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.