• Back in the late 1990s there were over 7,000 publicly traded companies, but that number declined over the last few decades to less than 4,000. This trend has been disrupted in 2021, thanks in part to the popularity of SPACs, with more than 900 new companies going public and raising close to $300 billion.
• A recent Janus Henderson survey shows that US companies increased their dividends by 10% in the third quarter. This large increase was led by financial companies, which have benefited from a decrease in payout restrictions from the Federal Reserve. Equally impressive to the payout increase was the fact that 97% of the largest US companies had raised or maintained dividends during the quarter.
• Despite high valuations, stocks may continue to outperform, given that bonds look extremely unattractive. Consider the following points: 1) Inflation has destroyed the appeal of bond yields (the real-yield of treasury inflation-protected securities is currently -1.17%) 2) dividends and capital gains from stocks are taxed less heavily than interest income from bonds and 3) looking back to 1926, when the 10-year treasury yield is less than 3%, as it is now, stocks have averaged a real return of 13.7% while bonds returned 0%. 
• Semiconductor stocks continue to benefit from multiple narratives. For example, the current “global chip shortage” narrative implies higher profits as a result of the supply scarcity while the “long-term economic rebound” narrative implies there will be more demand from clients like auto makers and data centers in the future. Nvidia, Qualcomm, and Advanced Micro Devices are all up over 33% this past month compared to just 3.9% for the S&P500.