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Premarket shares: The simple money boom is now coming to an end



But as the global economy has slowed down, dividend growth has returned to Earth.

"We have warned investors throughout the year that the rapid revenue growth they have had over the last couple of years was set to return to more normal levels," said asset manager Janus Henderson in a report released Monday.

The company found that softness in the world economy is starting to hit the corporate earnings, and thus dividends. The trend began in the second quarter and seeped into the third. While the company has not completed the outlook for 2020, it expects it to be more of the next year.

"We just have a very low growth, smooth economic environment," Jane Shoemake, Investment Director for Global Equity Revenue, told me.

Shoemake pointed out that even in this environment, companies "still generate some decent cash." Energy companies that restructured operations when oil prices were lower, for example, have given newer growth.

Figures: Janus Henderson expects dividend payout to rise 3.9% in 201

9 compared to last year. They are still projected to hit a record $ 1.43 trillion.

The big picture: In 2017, the world experienced synchronized economic growth, while 2018 & # 39; s Bonanza corporate income was fed up with the sugar high of US tax cuts. It was not going to last forever. Economic growth may continue to weaken higher, but the simple returns of recent years will be harder to come by. Share buybacks are also declining.

Aramco's more modest IPO may still destroy Alibaba

Saudi Arabia believes its massive oil monopoly is worth as much as $ 1.7 trillion – below the $ 2 trillion price tag said to be in demand by Crown Prince Mohammad bin Salman, but high enough to pave the wave for a record-breaking IPO before the end of the year.

  World's most valuable company: Saudi Arabia puts $ 1.7 trillion price tag on its oil monopoly

On Sunday, Saudi Aramco said it aims to sell 1.5% of its 200 billion shares in partial privatization for between 30 riyals ($ 8) and 32 riyals ($ 8.53) each.

At the higher price, Aramco would have chopped the largest stock exchange listing. It would raise more than $ 25 billion by taking the crown from Alibaba's public debut in 2014.

That's not all. At a valuation of between $ 1.6 trillion and $ 1.7 trillion, Aramco will be the most valuable company in the world. Right now, this title belongs to Apple, worth $ 1.18 trillion.

However, this victory is overshadowed by the fact that the IPO is more modest than first announced. Low oil prices, the climate crisis and geopolitical risk have created skepticism among international investors, and may force the Saudi kingdom to rely on wealthy local families, sympathetic sovereign wealth funds or major clients like China that subscribe to equities.

: The stock price will be set on December 5, and trading on the Saudi stock exchange is expected to start later that month.

Stocks are in vogue again

In August, the world's largest wealth manager told customers it was time to sell stocks – the first time since the Eurozone crisis that it had given this advice.

Now UBS supports its bearish warning. There is further evidence of recent investors' thinking that slowing economic growth does not indicate a threatening recession, giving stocks more operating time to push higher.

The Bank now believes that shares should constitute a standard share of the investors' portfolios. It is not exactly a bullish position, but it is far less gloomy.

Mark Haefele, chief investment officer at UBS Global Wealth Management, pointed to four reasons why the bank is more optimistic in a recent note to customers: 1) Progress in US-China trade negotiations, 2) increased stimulus from central banks, 3) more reasonable expectations of business earnings, and 4) preliminary signs that the economy is stabilizing.

Preventing a direct bullish attitude is trade uncertainty. "Of course, we must recognize that geopolitical gains can quickly evaporate," Haefele wrote, noting that President Donald Trump claims he has "not agreed on anything" with China.

Up next

[19659005] US Capital Flow Data for September arrives at 16 ET.

Coming tomorrow: Fresh data on the US housing market.


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