In February, markets rebounded thanks to growing optimism surrounding the economic recovery and decreasing number of COVID-19 infections. However, like January, the market cooled off towards the tail-end of the month due to a surge in interest rates and inflation fears.
To end the month, the S&P 500 was up 2.61%, the Dow was up 3.17% and the Nasdaq was up 0.93%.
So, what happened?
There were two main drivers of markets in February; treasury yields and corporate earnings.
The 10-year U.S. Treasury yield closed the month at 1.44%, the highest closing yield since February 2020.
The 10-year U.S. Treasury yield represents the cost of borrowing by the government and is a benchmark for other interest rates, including mortgages. The rise in yields, which triggered the selloff in late February, reflects growing concerns that stimulus measures could make the economy recover too fast, leading to an inflation surge.
To clarify, the rise in 10-year yields indicates investors anticipate inflation will increase, not that inflation actually increased.
Bloomberg Intelligence states that as of February 26, with 96% of companies reporting, the Q4 earnings growth rate for the S&P 500 index stands at 5.8%. This was better than analyst expectations, which predicted an 8.8% drop.
This is the first quarter of earnings growth since Q4, 2019.
Let’s do the numbers.
Value: $24,417 | Gain: +$169 | Return: ▲0.74% | Dividends: $34 | Investment: $1,375
My portfolio didn’t move much in February and was modestly up. In February, I received $34 in dividend income and reached $1,000 in annual dividend income milestone.
In February, I received $34 in dividends from the following companies:
- LOW: $0.95
- VZ: $1.66
- JPM: $2.31
- APD: $2.28
- DE: $0.63
- TXN: $2.25
- MA: $0.45
In February, 10 companies in my portfolio announced dividend increases.
- Yum Brands announced a dividend increase of 6.4% to $0.50 per share.
- Ebay announced a dividend increase of 13% to $0.18 per share.
- Xylem announced a dividend increase of 7.7% to $0.28 per share.
- Cisco announced a dividend increase of 2.8% to $0.37 per share.
- UPS announced a dividend increase of 0.99% to $1.02 per share.
- Eversource announced a dividend increase of 6.2% to $0.6025 per share.
- Walmart announced a dividend increase of 1.9% to $0.55 per share.
- Coca-Cola announced a dividend increase of 2.4% to $0.42 per share.
- Extra Space announced a dividend increase of 11% to $1.00 per share.
- Deer announced a dividend increase of 18% to $0.90 per share.
Portfolio All-time (3/5/2021)
Projected Dividend Income
Annual: $1,118 | Monthly: $93
That’s it for this month. Let me know if you have any questions or feedback. It’s always wonderful to hear from you.