"Your comments of the day are always compulsive reading but I am intrigued with the comments re: bear markets & yield curves this week. I network with one other FM subscriber regularly and we have both achieved significant synergies by discussing FM topics to enhance our comprehension of what can sometimes be very complex subjects. This guards against complacency in our investment approach. Although we are both FM subscribers for nearly 2 years now, we are both struck by how much more there is to learn. The discussion about Coca Cola, J&J and other high quality equities has also been very interesting. Is there a Nifty Fifty ETF instrument which will allow investors exposure to a basket of these equities?"

Eoin Treacy's view Thank you for your kind words. Discerning which shares claimed to be blue chips actually fit such criteria is often a rather opaque endeavour. The Dow Jones Industrials is probably the most well known index of such shares and the Stoxx 50 claims the same for Europe. The Morgan Stanley Multinational Index (New Nifty 50) is made up of US companies that derive a significant portion of their activity from non-US sources. The first two certainly have ETFs, I'm not so sure about the latter.

This article by Whitney Kisling for Bloomberg may be of interest as it focuses on expected dividend increases. Here is a section:

The fastest profit growth in 16 years means no companies in the Standard & Poor's 500 Index are likely to lower their dividends this quarter, the first time that's happened since 2004.

Of 245 companies in the index yet to announce payouts, 218 will probably keep their level and 27 may increase, according to forecasts based on data compiled by Bloomberg. The projections come from criteria such as options prices, comparisons with competitors and statements from management. S&P 500 dividends were slashed by a record $52 billion in 2009, S&P data show.

"Dividends show what companies are really saying, how they feel about the economy and their prospects," said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.6 billion in Elmira, New York. "When no companies are cutting, that is a signal that the economy is doing well, and it certainly helps the stock market."

Earnings in the S&P 500 rose 176 percent in the fourth quarter and probably climbed 44 percent in the first three months of 2010, giving companies a record stockpile of cash, estimates compiled by Bloomberg show. That helped spur Starbucks Corp., the world's largest chain of coffee shops, to offer its first-ever dividend, while Safeway Inc., Exxon Mobil Corp. and Chevron Corp. may boost theirs, the data show.

International Business Machines Corp., the world's biggest computer-services provider, increased its payout by 18 percent yesterday, more than forecast by Bloomberg. IBM is based in Armonk, New York.

Dividends were cut to the bone or eliminated during the credit crisis. As the recession ends, it is probably now reasonable to assume that remaining dividends are comparatively secure and the above article suggests they are beginning to increase, albeit from a relatively low base. The yield on Master Limited Partnerships or Canadian incomes trusts are probably now more secure for similar reasons. Earnings have been spectacular over the last six months, at least in part because of cost savings and favourable year over year comparisons. These benefits are unlikely to be repeated. Most companies have relatively limited scope to increase margins so soon after a recession, so while there is room for optimism, it needs to be tested against the chart action.

The Dow Jones Industrials found support in the region of the 200-day moving average in February and rallied impressively, becoming somewhat overextended relative to the 200-day moving average in the process. Yesterday was the second downward dynamic in as many weeks and caps the short-term advance. Wall Street has been steadier than most European markets and so far there is little evidence that this is anything other than a temporary interlude in the broad medium-term uptrend, which in extremis is likely to be limited to a mean reversion towards the 200-day MA.

The Stoxx 50 failed to sustain the break to new recovery highs earlier this month and has already pulled back to test the 200-day MA, but an upward dynamic and/or sustained move above 2700 would be required to indicate demand has regained the upper hand.