# 652 – 💸 It’s raining (dividend) returns – The Average Joe
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    # 652 – 💸 It’s raining (dividend) returns

    victorlei

    March 14, 2024

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    Good morning. Well, it’s official: Biden and Trump have secured enough delegates to clinch a general election rematch. Before we worry about that, let’s distract ourselves with some presidential election trivia:

    • This is the seventh general election rematch ever and the first since 1956 when Dwight Eisenhower crushed Adlai Stevenson for a second straight time.

    • Trump is the first candidate since Nixon in 1968 to get nominated again after losing a general election.

    • This is also the earliest each party’s presidential nomination was secured since Bush-Gore in 2000.

    And we’ll leave it at that. After all, we still have 235 days of Trump-Biden discourse until Election Day.


    ROBOTICS

    It’s Not Just You, Your Coworker Is A Robot: Why Companies Are Embracing the Humanoid Hype

    Attention Earthlings: The humanoids are here and coming to a workplace near you. Once confined to the realms of science fiction, these robots are cropping up worldwide — from warehouses to workplaces, their human-like form makes it easy for them to handle all kinds of tasks.

    What’s behind this robo-revolution? Advances in manufacturing and cheaper hardware costs are driving down the price of building or buying robots capable of carrying out repetitive tasks across industries. The average selling price ranges from $10K to $15K, making them an attractive investment for businesses — especially since many current robots can’t outright replace humans (yet).

    • In 2023, 21% of warehouses used robots in some capacity, up from 15% in 2018, according to Interact Analysis.

    • Goldman Sachs predicts the global robot market could touch $38B by 2035, while Global X estimates humanoids might impact 35% of the manufacturing workforce worldwide.

    Companies crave the human(oid) touch

    Last year, big players like Apptronik, Boston Dynamics, and Tesla ($TSLA) stepped into the arena, revealing their human-like robots and joining a crowded field of companies looking to sell hardware helping hands. Agility Robotics’ new $250K robot, Digit, is already assisting in Amazon’s ($AMZN) warehouses, adding to its fleet of over 750K robots. The Global X Robotics and Artificial Intelligence ETF ($BOTZ), which tracks robotics companies, has seen a boost of ~38% in the past year thanks to this humanoid hype.

    • The demand is fueling massive funding for robotic startups — with humanoid robotics startups securing ~$1.6B over the last five years.

    • One notable example is Figure, which raised $675M from investors like Jeff Bezos and Nvidia ($NVDA) just last month despite not yet having a commercial product.

    Forward-looking: Recent advancements in artificial intelligence (AI) and computer vision could enable humanoids to tackle more complex tasks. Robotics companies aim to achieve this by integrating AI to enhance humanoid capabilities. In March, OpenAI announced a collaboration with Figure to bring ChatGPT-style AI to humanoid robots, potentially revolutionizing how we use robots in our daily lives and industries. So, it might not be long before you ask Alexa to do more than just check the weather — it could be vacuuming your home, too. Oh wait, it’s already happening.


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    LARGECAP RECAP

    🇨🇳 Is China’s stock market finally making a comeback?

    The last four years haven’t been easy for China, which has faced a property crisis, slower growth, and a declining population — leading to a downturn in global investor interest. Since their 2021 peaks, Chinese stocks have lost more than half of their value, and India has overtaken Hong Kong as the world’s fourth-largest stock exchange. But things could be turning a corner…

    • Bloomberg reports that Chinese stock benchmarks have rallied over 20% from their recent lows — placing them back in bull market territory.

    • Skeptical investors are now pouring back into Chinese stocks amid a $278B stimulus program, with record buying seen in China’s largest onshore ETFs.

    Not so fast… Although Ronald Temple, Lazard’s Chief Market Strategist, sees potential for China to be “one of the best performing equity markets as a trade over the next 12 to 18 months,” it’s important to note that China has experienced false recoveries in the past — only to continue free falling. Additionally, the upcoming US presidential election, with Donald Trump on the Republican ticket, adds uncertainty. Trump has proposed hefty tariffs of over 60% on Chinese goods, which could snuff out any chances of a China comeback.

    ✈️ Boeing’s struggles are rippling throughout the airline industry

    Another day, another Boeing ($BA) headache. The plane manufacturer’s nightmare year — kicked off by a door plug blowout in January — is starting to hurt airlines’ businesses. The FAA’s probe into Boeing’s manufacturing processes is slowing down plane deliveries, resulting in fewer 737 MAX jets for airlines. This is causing them to cut flights and change growth plans.

    • Southwest ($LUV) has announced it would cut flight capacity and reduce pilot hiring by 50% to account for lower revenue as the company, which only flies Boeing 737 jets, expects to receive 41% fewer MAX 8 deliveries this year.

    • Alaska Airlines ($ALK) is facing uncertainties in its flight plans because of Boeing’s delays, and the company has reported a $150M profit loss due to the grounding of MAX 9 jets after a door blew out in-flight.

    Union talks begin: Making matters worse, Boeing is set to begin labor discussions soon. Negotiating a new union contract to avoid potential walkouts or strikes later this year is critical. However, given Boeing’s current quarrels with regulators and customers, it may have limited bargaining power. Therefore, it’s likely to accept the union’s proposed 40%+ pay hike instead of risking more disruptions.


    JOE’S MARKET PULSE

    🔗 Williams-Sonoma / Dollar Tree

    The E-bike industry is accelerating: Between 2019 and 2022, the sales of e-bikes in the US have quadrupled to 1.1M thanks to improving technology, as well as state and city initiatives to electrify transportation. Veer is at the center of that growth — supplying their patented carbon fiber belt drivetrains to e-bike manufacturers, which replaces outdated and dangerous metal bike chains with durable, maintenance-free drive systems. And since its founding in 2019, it’s grown over 200% annually. Invest in the next phase of Veer’s growth →*

    Markets & Economy

    IRS launches free online tax filing tool: Direct File lets you file a tax return directly with the IRS — though for now, it’s only available in 12 states and only applies to federal income taxes. The tool aims for simplicity — and could unseat tax prep giants like TurboTax. [Read]

    Intel’s ($INTC) $3.5B military grant is in jeopardy: Originally, the Pentagon was going to pay for Intel’s grant to build chips for the military. Now, they don’t want to, potentially forcing the Commerce Department to use CHIPS money to pay Intel. That means more CHIPS funding going towards military rather than commercial uses. [Read]

    EU passes first major AI regulations: The regulation classifies AI applications by risk — from low hazard to “unacceptable.” Legal analysts call the move a major milestone in tech regulation — but the key will be successfully implementing the new guidelines. [Read]

    Business & Wealth

    Public radio is in peril: As donations and sponsorships slow, stations like Colorado Public Radio have been forced to make layoffs — highlighting systemic challenges in the digital age. [Read]

    Budget airlines upsell flyers with new perks: Frontier ($ULCC) may not have first-class options, but you can now pay an additional fee for a row with an empty middle seat and 4-5 more inches of legroom. [Read]

    Traffic safety experts rank 14 partially automated driver systems: The main takeaways: drivers tend to over-rely on these systems, which can make them more complacent (and less safe) on the roads. Only Lexus’ Teammate with Advanced Drive reached safety benchmarks, while Tesla’s and Ford’s ($F) systems tested below average. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


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    DIGIT OF THE DAY

    Global Dividend Payouts Hit Record High of $1.7T In 2023

    Last year, investors reaped the dividends of their hard work, as corporations paid shareholders a record $1.66T — up from $1.57T in 2022. Banks fueled nearly half the growth over the past two years amid higher interest rates.

    • 22 countries — including the US, France, and Germany — saw their highest-ever payouts, with 86% of listed companies worldwide maintaining or increasing dividends.

    • Significant cuts from companies like BHP ($BHP), Petrobras ($PBR), and Intel dented the global dividend growth rate.

    Is the dividend future bright? Janus Henderson’s Ben Lofthouse sees a bright future — “Corporate cash flow is strong, and that’s fueling dividends and share buybacks.” Sectors like oil, healthcare, and consumer goods are expected to pick up the slack for slowing bank dividends, keeping the momentum going. With a projected total dividend payout of $1.72T in 2024, investors can anticipate another year of raining returns.


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