The Dividend Cafe

Well, I am back from my family’s little jaunt through the Bahamian Seas and am grateful to Brian Szytel for filling in with the DC Today for a few days last week. I hope you will find today’s old-school long-form DC Today informative. I will bring you the DC Today from New York on Wednesday and Thursday this week, as well as Dividend Cafe on Friday. Trevor will handle DC Today duties tomorrow as I...

As I am out of the country these last few days with my family on a brief trip as the kids enjoy a week out of school, returning today, I am doing this week’s Dividend Cafe “old school” – which is to say, jumping around topic to topic and answering a handful of questions along the way. I love the “single topic” Dividend Cafe writings each week, but every now and then, it is fun to mix it up a littl...

Brian Szytel here with you this up day in markets albeit in a choppy 500 point trading range of a session this holiday shortened week. I have some important updated economic numbers, along with comments on currency and real estate you will want to be sure to check out. Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Coming off the worst day of the year yesterday we get some market recovery and a little volatility relief with rates coming off yesterdays highs. Today is a more Fed heavy podcast with meeting minutes released which I discuss along with some economic takeaways on the day Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Today's Post - https://bahnsen.co/3XR3bLi Good afternoon, Brian Szytel here with you today, helping you navigate in a sea of red ink in today’s trading day. A volatile day with the VIX up big, with much of the narrative revolving around interest rates moving higher across the spectrum, along with mixed earnings and economic data and all of which I fully unpack in today’s video podcast Links mentio...

Today's Link - https://bahnsen.co/3IxtjXf Since the new calendar year began just about six weeks ago oil prices are basically flat, having started right around $80/barrel and still sitting now right around the same level.  The energy sector indices are all up on the year, somewhere around +1%, so nowhere near the level, the market is up year-to-date, but up nicely nonetheless.  It's not been a ral...

ASK DAVID “Do you buy this stuff from Larry Lindsey and other economists like him that are worried that financial conditions are good enough that the Fed needs to assume their tightening is ‘not tight enough’? The reasoning seems to be that the Fed should take a message from financial conditions that they need to be tighter. Should the Fed be responding to financial conditions?” ~ L.K. I disagree...

Today's Link - https://bahnsen.co/3xqUhJS ASK DAVID “If valuation matters at the time of purchase, why would it not matter at the time of reinvestment of dividends from that same company purchased?” ~ Steve The simple answer is – it does, and if we felt a company’s valuation was so excessive that we didn’t want dividends reinvested in that company, why would we want to own the company at all? So t...

Today's Link: https://bahnsen.co/3E7qE3V The CPI number for the month of January came in at +0.4% for core inflation and +0.5% for headline inflation, exactly in line with expectations. The year-over-year number is down to 6.4%, vs. the high of 9.1% last summer, and less than last month’s 6.5%. This represents seven months in a row of a declining inflation rate. Core goods have now deflated by 4.8...

Today's Link: https://bahnsen.co/3HXUEAl A rally day in the markets, telling you exactly what the markets think about the theory of extra-terrestrial attacks from UFOs… More below! Dividend Cafe took a stab Friday at applying our present economic outlook (short-term and long-term) to the logic of dividend growth investing. Off we go … Market Action Futures opened down -70 points last night just as...

Link to Dividend Cafe: https://bahnsen.co/3jErUVn I wrote last week about the multi-year (and indeed, multi-decade) beliefs we have about macroeconomic conditions. In a nutshell, I made the case that we face a form of “Japanification” where the diminishing return of fiscal and monetary efforts to goose our economy from the impact high debt has had on its growth leads to yet more debt and also less...

The DC Today - Thursday, Feb 9 - https://bahnsen.co/40IKvQA Ask Trevor “It doesn’t seem like stocks have a believable catalyst to go up from here, wouldn’t it be wise to sell stocks and buy a short term treasury for the guaranteed interest?” I can sympathize with the premise here – if earnings face some headwinds, and rising rates compress multiples, you want to know what drives stock prices highe...

Good afternoon, Brian Szytel here with you today on this down day in markets following yesterday’s unconvincing (to me, at least) Fed-led rally. Today there is more chatter from several other Fed Presidents I’ll discuss, along with some comments on inflation, recession indications, and some takeaway comments from last night’s State of the Union address. Plenty to go through, including my Super Bow...

Lots of chatter from Fed Governors these days with Kashkari saying we need higher rates for longer, Bostic in Atlanta saying January’s jobs report speaks to another rate hike (which was already priced in), but now today Jerome Powell basically reaffirming his message of last week, which is one of an imminent pause. Right now, we see a 91% chance of a quarter-point hike at the next meeting and a 70...

Futures opened last night down -80 points and stayed down near -100 points into the evening. This morning futures pointed to a down -200 point open pre-market. The market opened down -150 points, worsened a bit, and then steadily improved throughout the day. The Dow closed down -36 points (-0.11%) with the S&P 500 down -0.61% and the Nasdaq down -1%. We are exactly halfway through earnings sea...

I have a view of where the United States is in its economic cycle that I have had for quite some time, and that has substantially informed many of the macro assumptions I bring to portfolio management. I have shared this overarching worldview many times over the years in Dividend Cafe and elsewhere, and I am constantly refining it, analyzing it, and even challenging it. It has the word “deflation”...

ASK DAVID “Could you give us some tips on what we can do to fight ESG?” ~ Mark S. It is the subject of much obsession at places like National Review’s Capital Matters, and I am engaged in many efforts to fight for the interests of shareholders when it comes to the activity of corporate managers taking their P’s and Q’s from the radical and incoherent agenda of various fads and virtue-signaling alp...

ASK DAVID “When you talk about a stock on television, but then later end up selling as your viewpoint changes, do you publish or broadcast your new view somewhere?” ~ Tom As for the more practical aspect of your question, no, we really couldn’t possibly be responsible for “running a portfolio on TV” if you know what I mean. Updating what we have added and subtracted and bought and sold and when an...

ASK DAVID “Would you mind giving me your Cribb note version of your expectations on the USD’s devaluation now that Saudi Arabia (and probably others) are willing to trade oil for other currencies than the US dollar? If you expect a significant currency related (not just inflation related) devaluation, do you have an idea of how we can offset that?” ~ D.M. The main thing to say is that: Saudi has n...

Futures opened last night down -50 and were down -85 into the evening. This morning markets pointed to a down -265 open pre-market. Futures would improve in the next three hours before the opening. The market opened down just -80 points and then went positive before then steadily declining throughout the day. The Dow closed down -261 points (0.77%), with the S&P 500 down -1.30% and the Nasdaq...

The month of January has launched 2023 in a very different direction than 2022 thus far. I do not mean because markets are up thus far whereas they were down in 2022 (though technically both of those things are true). But beyond the mere directional change in markets (which could reverse at the drop of a hat), the themes and factors influencing markets – in other words, the stuff that matters – ha...

Dow: +204.45 (+0.61%) S&P: +1.10% Nasdaq: +1.76% 10-Year Treasury Yield: 3.497% (+3 basis points) Top-performing sector: Energy (+3.32%) Bottom-performing sector: Consumer Staples (-0.28%) WTI Crude Oil: $81.04/barrel (+0.89%) Key Economic Point of the Day: Weekly jobless claims again reflected the strength of the labor markets with initial claims coming in at 186,000 versus a median forecast...

Dow: +10 points (+0.03%) S&P: -0.02% Nasdaq: -0.18% 10-Year Treasury Yield: 3.45% (-1.8 basis points) Top-performing sector: Financials (+0.74%) Bottom-performing sector: Utilities (-1.36%) WTI Crude Oil: $80.49/barrel (+0.45%) ASK DAVID “This statement in Brian’s response to yesterday’s question caught my eye: “…because inflation is ultimately driven by demand.” I find this interesting becaus...

Futures opened last night about even give or take 20 points, and stayed that way until early morning when we began moving lower and then notably so pointing to a down -150 point open. We opened down about -170 points but were down north of -250 after the first 20 minutes of trading. Around 1145 EST we had slightly better than expected PMI data released and fully recovered the morning losses tradin...

Futures opened last night pretty close to flat (down -20 points) and stayed right there into the evening. This morning futures pointed to a dead flat open pre-market when I first woke up. The market opened flat but moved up from there and stayed up with a few zigs and zags along the way (see chart below) The Dow closed up +254 points (+0.76%), with the S&P 500 up +1.19% and the Nasdaq up +2% T...