What’s Going On Here?There wasn’t much to separate the Brits from the Yanks on Wednesday, with Walgreens Boots Alliance, Macy’s, Sainsbury’s, and Greggs all reporting similar-looking earnings updates. What Does This Mean?Stateside, drugstore chain Walgreens – which recently attracted a takeover bid from private equity firm KKR – saw its stock fall 6% after it reported worse-than-expected quarterly revenue and profit. Department store Macy’s, on the other hand, didn’t suffer as big a decline in its holiday sales as investors had feared, and its shares rose 2%.
It was the same story across the Atlantic on Wednesday, with holiday revenue at Sainsbury’s – the UK’s second-biggest grocery chain – falling by less than expected. The shrinkage of its non-food product sales was partly offset by growth in its grocery business, which contributes three-quarters of its revenue. Baker Greggs, meanwhile, continued to lead a healthy lifestyle: it raised its annual profit forecast yet again, partly thanks to its lineup of vegan-friendly snacks. Why Should I Care?The bigger picture: Consumo wrestling.
The services sector represents 80% of America's economy and 85% of Britain's, and it’s largely driven by consumer spending. It makes sense, then, that both countries – and their retailers – rely on consumer spending for the vast majority of their growth. But Walgreens’ negative update and Greggs’ positive one – at a time when American shoppers have been doing their bit and the UK’s haven’t – is a reminder that consumer spending trends aren’t all-encompassing: retailers’ earnings might still exceed investors' expectations, and stock prices might still rise.
For markets: Where earnings go, dividends follow.
American companies paid investors almost $500 billion in dividends last year – a new record – and analysts predict that’ll rise another 3% this year. Companies have also recently supplemented dividends with share buybacks, which typically have a positive effect on share prices and tend to attract lower taxes – in turn boosting shareholder returns. | 
