Today's Scoop:

Hey friends, Punxsutawney Phil says we have six more weeks of winter.

Here's what you need to know today...

1. Layoffs are lower than the headlines would imply.

2. US manufacturing activity keeps signaling a slowdown.

3. Policymakers around the world see inflation going away.

S&P 500: 4,179.761Mo: +9% | 1Yr: -7% | 5Yr: +60%

The market continued upward today, fueled by a strong report from Meta and more hope that economic policy will start to benefit stocks.

Policymakers around the world acknowledged that inflation is trending away. Yesterday, the US Central Bank issued its lightest round of economic restrictions of the past year, hinting that it may be nearing an end to its policies meant to cool the overheating economy. Central banks in Europe today had similar messages. It would be a massive win if policymakers could cool the economy without freezing it into recession.

The manufacturing sector is cooling. On Wednesday, the Institute for Supply Management reported that manufacturing activity dropped for the third straight month to the lowest level since May 2020.

Layoffs are broadly still pretty low, despite all of the announcements. The Labor Department said initial unemployment claims dropped to a nine-month low last week. The bulk of the layoff announcements has been in tech. 

Click to dig in & vote your reaction, see how others feel

• Shell pumps record profits and rewards investors [🤓]

• Ferrari sells more sportscars than ever

• JPMorgan buys forests for the carbon offsets

• Meta cuts costs and rewards investors [🤓]

• Rivian slashes staff to compete with Ford and Tesla

(These links only work for 24 hours while the story is live)

Dividends & Buybacks

Companies with extra cash can reward shareholders for their support in two ways. First, they can distribute money directly to investors, literally giving them a share of the profits by paying them a dividend. Companies will declare that every investor gets $X for each share they own.

Second, companies can buy back their own shares from public investors. Buybacks allow companies to reduce the number of outstanding shares in the market, making each remaining share more valuable. They're slicing their company ownership into fewer pieces, allowing each shareholder to own a greater percentage of the company.

If companies pause or slow either of these activities, it can mean they're preparing for trouble. If they raise their dividend or increase buybacks, it's a good sign.

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