Stocks are down today, fueled by concerns that bond yields have turned negative on German government bonds and that U.S. Treasuries have suffered an “inversion,” with yields on 10-year bonds falling below those on three-year bonds. That kind of activity can foreshadow a recession, if history is any clue.

The Wall Street journal said these two negative omens reflect falling bond yields world-wide, which may be caused by weakness in European manufacturing activity.

So I’m looking at my portfolio and thinking, is there anything I’d like to buy on the dip this week? In a “fools rush in” state of mind, I’d be tempted to take a nibble on Senior Housing Properties Trust and Clearway Energy again. Both stocks are depressed due to concern about the viability of their dividend. In SNH’s case, because a key tenant in its senior housing properties is facing financial troubles. In CWEN’s case, because of fallout from the PG&E bankruptcy. Both stocks will recover, I think, and both should remain solid dividend payers, even if one or both have to trim their payout ratio. But you have to be willing to buy shares with a lot of uncertainty baked into their current share price. Most investors would like a little more visibility into how their challenges are going to be resolved before taking the leap.

Bank shares? UBS shares are down more than 2% and the company still sports an annual dividend yield of more than 5%. Tempting, but I’m inclined to wait and see if today’s sell off is just a hiccup or if the omens for a slowdown turn out to be accurate.

 

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