Political  Calculations

The number of U.S. companies acting to cut their dividends during July 2014 remained elevated at 15, down slightly from the 16 U.S. companies that took similar actions in June 2014, as recessionary conditions continue to be present in the U.S. economy.

Number of Public U.S. Companies Posting Decreasing Dividends, January 2004 through July 2014

We should note that most of the dividend cutting activity that we've been observing since last year has occurred at companies with comparatively small market capitalizations, such as the companies that make up the Russell 2000 stock market index. Financial Services represents the largest single industrial sector within the Russell 2000, accounting for 24.1% of the index' market capitalization.

Approximately one-third of that weighting is represented by Real Estate Investment Trusts, which we've previously recognized as being especially sensitive to the interest rate hikes that came in anticipation of the Federal Reserve's statement that it would progressively scale back its purchases of U.S. Treasuries and Mortgage-Backed Securities in 2014.

Political Calculations

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