Factoids for October 10, 2011

Monday, October 3, 2011
The VIX Index surged 160% from 16.52 to 42.96 in Q3’11. The S&P 500 fell 13.9% in Q3. The VIX rarely climbs above 40. Over the past 20 years, it has been above 40 only about 3% of the time, according to Bloomberg. The good news is stocks often rebound following a sharp sell-off like the one just experienced. Tim Hayes, chief investment strategist for Ned Davis Research, noted that, since 1924, the S&P 500 has gained a median 4.9% in Q4 when following Q3 losses surpassing 8%.

Tuesday, October 4, 2011
In September, the dividend-payers (389) in the S&P 500 (equal weight) posted a total return of -8.73%, vs. -10.83% for the non-payers (111), according to Standard & Poor’s. Y-T-D, the payers were down 10.80%, vs. a decline of 15.26% for the non-payers. For the 12-month period ended September ’11, payers were down 0.17%, vs. a decline of 5.15% for the nonpayers. The number of dividend increases y-t-d totaled 242, up from 177 increases a year ago. Seventeen companies initiated dividends, up from 10 a year ago. Four dividends were cut, up from two cuts last year.

Wednesday, October 5, 2011
Office rents are rising again. Data from Reis Incorporated shows that the average effective rent, the amount tenants pay after deducting any landlord concessions, rose from $22.25 per square foot in Q2’11 to $22.39 in Q3’11, the highest it has been since Q4’09, according to Bloomberg. The average was $22.04 a year ago. Landlords had a net increase in occupied space of 6.19 million square feet, the fourth straight gain. The national vacancy rate dropped slightly from 17.5% to 17.4%.

Thursday, October 6, 2011
Approximately 7,000 publicly owned companies report dividend information to Standard & Poor’s Dividend Record. In Q3’11, the number of companies that increased their distributions totaled 350 – up 17.1% from the 299 increases registered in Q3’10. The number of companies that decreased their distributions totaled 23 – down 34.3% from the 35 decreases registered in Q3’10. Howard Silverblatt, Senior Index Analyst at S&P, reported that payout rates, which on a historical basis have averaged 52%, remain near their lows at less than 30%. So companies have a lot of room to boost their dividend distributions.

Friday, October 7, 2011
Moody’s reported that the global speculative-grade default rate stood at 1.8% in September, no change from August, according to The Wall Street Journal. The rate was 4.0% a year ago. Moody’s is forecasting a default rate of 1.4% for December 2011. The U.S. speculative-grade default rate stood at 2.0% in September, down from 2.1% in August. The rate was 4.0% a year ago. The default rate on senior loans stood at 0.90% in September, down from 1.05% in August, according to Standard & Poor’s LCD. At this pace, the default rate could fall to 0.23% by year end.

This information is provided by First Trust Advisors L.P. • 1-800-222-6822 • Approved For Public Use • 10/10/11