The Dividend Aristocrats (ETF: NOBL) is an index made up of 57 S&P 500 stocks that have long histories of increasing their dividend payments to shareholders. In fact, each of these companies has raised their dividend for 25 consecutive years or more; some have even been growing their dividends twice as long. After a sharp rally at the end of August through mid-September which brought the index up to all-time highs, the group fell back below its prior highs at the start of the month.  Having fallen further since then, NOBL now sits at the bottom of its long term uptrend.

Below is a list of the 20 Dividend Aristocrat members with the highest yields.  A large portion of the top 20 are Health Care and Consumer Staples stocks (each sector having 5 of the 20) with Industrials also having a sizable contribution (4 stocks) to the highest yielders.  Currently, there are three stocks that yield over 5% including Exxon Mobil (XOM), AT&T (T), and AbbVie (ABBV).  AbbVie (ABBV) — which was spun off from Abbott Labs in 2013 — tops this list with a yield of 5.8%.  Even though the stock has been in a downtrend over the past year, it has still increased its dividend. Multiple other stocks in this group including Franklin Resources (BEN), 3M (MMM), and Johnson and Johnson (JNJ) are also in downtrends.  Meanwhile, others such as Coca-Cola (KO) are in uptrends. We created a custom portfolio of all the dividend aristocrats for members so that they can keep tabs on the trends of these stocks. Some other notable high yielders include People’s United Financial (PBCT) and Leggett & Platt (LEG). These two have some of the highest yields in spite of also having the third smallest and smallest market caps, respectively, of all 57 dividend aristocrats. JNJ, on the other hand, has the largest market cap of all aristocrats.

While ABBV (formerly Abbott Labs) has the highest yield of the top 20, it does not have the longest track record of growing its dividend even though it has been doing so for nearly 50 years.  Genuine Parts (GPC) actually holds that accolade having raised its dividend for 63 consecutive years. Of the other top 20, 3M (MMM) and Emerson Electric (EMR) are the only other stocks to have done so for 60 years or more.  A few others like Johnson and Johnson (JNJ), Federal Realty (FRT), and Coca-Cola (KO) have grown their dividends for better than a half-century.  Start a two-week free trial to Bespoke Institutional to access our custom portfolios, Trend Analyzer, Chart Scanner tool, and more.

Through most of the second half of the year, a series of mass protests in opposition to Chinese extradition legislation has been consuming Hong Kong.  While smaller-scale protests have been taking place since the early spring, things really began to ramp up in June when hundreds of thousands took to the streets. In the more than three months that have passed since then, some of the effects are beginning to be seen in the country’s economic data that we track in our Global Macro Dashboard.  Markets were the quickest to respond as the country’s Hang Seng Index has fallen roughly 5% since the start of June.  The HSI is now in a defined downtrend over the past couple of years and recently has been making its way towards support at last year’s lows.

Hong Kong retail sales have tanked since protests began.  In the months leading up, retail sales had been contracting year-over-year for four consecutive months. The reading for May came in at -1.4%, but once protests took effect the following month, retail sales collapsed to a -6.7% growth rate. Conditions have only worsened from there as retail sales contracted 23% YoY in August. That is the worst contraction in the history of the data going back to 2006, surpassing the previous low of -20.6% in February 2016.

Likely as a result of people taking to the streets rather than showing up to work, the unemployment rate has begun to tick higher over the past few months.  For the entire year before the protests began, Hong Kong’s unemployment rate held steady at 2.8%; the lowest level of the past decade. But the July release showed the rate has risen 0.1% to 2.9%. That was the first increase of any kind since the one month blip in July of 2017.  Start a two-week free trial to Bespoke Institutional to access our Global Macro Dashboard as well as our Economic Indicators Database and much more.

The S&P 500’s rally to end last week proved to be a pump-fake, as the gains have already been washed away this week.  As shown below, the S&P is still hanging onto an uptrend for the year, but its recent failure to make a new high above its July highs is a negative technical set-up.

Below are trading range charts of the ten major S&P 500 sectors (Real Estate is excluded).  The red shading represents overbought territory while the green shading represents oversold territory.  The white line is the sector’s 50-day moving average.  Every cyclical sector is now below its 50-day moving average.  Consumer Staples and Utilities are the only sectors above their 50-DMAs and the only sectors that managed to make new highs during the S&P’s early September rally.

While technicals don’t look especially positive, things haven’t broken down yet either.  Most sectors are simply at or near the bottom of multi-month sideways ranges.

Some of the key breadth measures we track have gotten weaker and weaker with each rally recently.  And while the S&P is still above lows it made in early June and again in August, the percentage of stocks now trading above their 50-day moving averages has moved back down to levels seen at those prior lows.

As shown below, 32% of S&P 500 stocks are now above their 50-DMAs, and Utilities and Real Estate are the only sectors with healthy readings of 86% and 69%, respectively.  Defensives have been the place to be.

Technology has also started to weaken significantly.  Only 27% of stocks in the sector are above their 50-DMAs, which is five percentage points below the reading for the S&P 500.  Over the last few years, Tech has always been a market leader, but the sector’s internals are starting to show cracks that we don’t want to see.

There are four sectors with breadth readings in the teens.  Communication Services, Health Care, Energy, and Financials all have 18% or less of their stocks above their 50-day moving averages.

It has been a tough week and a half for bulls as equities have been under pressure since the start of October.  While issues surrounding China don’t seem to be getting any better, seasonal trends may be starting to take a turn for the better.  The gauges below are from our Seasonality Tool, which is part of the interactive section of our website.  In it, we calculate the S&P 500’s historical median return in the one week, one month, and three months from the close on 10/8 over the prior ten years.  While the S&P 500’s median one week return is a middling 0.33%, ranking in the 53rd percentile relative to all other one week periods throughout the year, the median one and three-month returns have been much more impressive at 2.41% and 6.22%, respectively.

In addition to the upcoming month being a good seasonal period for the equity market, there are a number of stocks that have traded higher during the one-month period in each of the last ten years. While it’s relatively common to see one or two stocks that have a perfect record of trading higher during a random one-month period of the year, nine is pretty high.  Also, with names like Hormel (HRL), Analog Devices (ADI), and Starbucks (SBUX) on the list, they aren’t all companies that no one has ever heard of either!

Below we have listed how each of the stocks above look in our Trend Analyzer screen. On the left side of the table, we show each stock’s performance metrics over the last week and YTD as well as where each stock is trading relative to its 50-day moving average.  In addition to the performance metrics, we also show whether the stock is in an up, down, or sideways trend using our proprietary algo, how the stock’s timing currently stacks up, whether the stock is oversold, overbought, or neutral, and then finally where it is trading relative to its trading range.  Looking at the names on the list, SBUX looks the most attractive as the stock is at extreme oversold levels but also has a perfect timing score given its long-term uptrend.  Meanwhile, Pier 1 (PIR), which is in a downtrend and coming off overbought levels, currently has a timing score that ranks as poor.  Interested in tracking seasonal patterns of the market and individual stocks?  Start a two-week free trial to Bespoke Institutional to access all of our research and our popular interactive features including our Stock Seasonality and Trend Analyzer tools.