The Dividend Cafe - Monday - August 10, 2026

Episode Date: August 10, 2026

Today's Post - https://bahnsen.co/4hmEuE3 David Bahnsen hosts the Monday Dividend Cafe, recapping a quiet market day with the Dow down 60 points, the S&P essentially flat, and the Nasdaq down 32 bps, while noting rapid credit-spread tightening and the 10-year yield closing at 4.7%. Energy led sectors as oil rose over 5%, while REITs lagged; he highlights that most S&P 500 profit-margin expansion is concentrated in large tech rather than the broader index. PitchBook data show 33,600 unsold private-equity-owned companies globally, up year-to-date. On policy, the Senate recessed after voting to fund the government through mid-December, with no movement on a GOP budget blueprint or the CLARITY crypto bill. The key development was Friday’s jobs report: 23,000 jobs lost, large downward revisions, and a lower unemployment rate driven by labor-force exits, reducing September hike odds to 50/50. Redfin data show widespread below-ask home sales, especially in Florida and Texas, and he addresses a listener question about faith references in his Friday piece. 00:00 Welcome and Agenda 00:24 Market Wrap and Rates 00:57 Credit Spreads and Risk 02:18 Sector Moves and Breadth 02:57 Margins and AI Divide 04:12 Private Equity Backlog 05:17 Friday Episode Plug 06:02 Middle East and Oil 06:28 Washington Policy Update 07:21 Jobs Report Shock 07:55 Fed Outlook After Jobs 08:43 Housing Price Softening 10:50 Energy and SPR Levels 11:29 Ask TBG Faith Question 13:49 Closing and Friday Preview Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Hello and welcome to the Monday edition of the Dividend Cafe. I am your host, David Bonson. We have a pretty conventional trip around the horn today, all of our normal topics. Nothing earth-shattering in any category, but some important things to cover in each one. So I'm going to get right to it. I don't think I'll need to keep you too long tonight. markets opened 100 points down this morning and more or less all three market indices stayed in a pretty tight range all day. You ended up with the Dow closing down 60 points, which was 11 basis points in percentage terms. The S&P was basically flat down just six basis points and then the NASDAQ was down a bit more down 32 basis points. So nothing dramatic on the market front. Credit spreads have tightened in the last 10 business days. And that's an interesting thing in terms of how quickly it's happened.

The high yield spread was about 287 wide at the very end of July and it was 270 this morning. So you saw credit market improvement, meaning when spreads come in, that shows investors requiring less yield to buy riskier credit, and that happened at the same time that equity markets were going higher, that there was a general kind of increase in risk appetite. But the credit spread tightening that took place more or less under. undid about two months worth of widening in about two weeks, a little less than two weeks. And so that's where we are from a kind of risk appetite standpoint. It's not a huge surprise based on the way a lot of things have gone over the last couple weeks. The 10-year yield today

closed at 4.7 percent. That was up four basis points on the day. Of course, Friday it had been down behind that terrible jobs report we're going to get to in a moment. Within equity markets today, energy was up 4.6%. It had been down quite a bit last week. Oil itself was up over 5%. But the energy equity sector up over 4.5%. The worst performer today was real estate. The reed sector was down a little over 1.7%. In terms of that overall market breadth and market risk environment, over 70, 93% of companies in the S&P 500 are now trading above their own 200-day moving average, almost 90% in the financial sector above their own 200-day moving average. There's a chart I want to put up real quickly that Torsten Sloc, the chief economist at Apollo,

had shared this morning or over the weekend that I want to point out, When we talk about margins, profit margins in the S&P 500, I just think it's a helpful little thing to see here that while aggregate margins have gone higher across the index, you can see that in the S&P 493, that the vast majority of S&P has seen kind of steady margins for quite a long time. The expansion of margins has been in those very scaled big tech,

companies, and it begs the question as to whether or not you will see the higher margins from people that are essentially selling AI translate to higher margins for the vast majority of the world that is buying AI, application, enterprise, et cetera. We do not see it yet. Now, of course, it very well could be a TBD, but I just think this chart was interesting to reflect some things. Last thing I want to say on markets before I start going through

the other categories of the day is a report I read in Pitchbuck this morning that there are right now about 33,600 unsold companies that are owned by private equity sponsors globally and that number was 32,500

at the beginning of the year. Now that's globally. Of those 33.6, about 13.5 are U.S.-based. Okay, well, what you can do, the math here is say, that means that there are 1,100 more private companies that have been bought by a private equity sponsor this year than have been sold, because obviously some have been sold,

but the net number is 1,100. So a lot of activity happening in the private equity world, both U.S. and globally, but there's still continues to be an easier time for a company to be bought by private equity than for one to be sold. All right, before I move to our other categories, just very quickly, the dividend cafe from last Friday, I really appreciated the feedback that I've received. And I want to say that it might be worth checking out if you're interested in the sort of macroeconomic principles and beliefs, as opposed to all of the granular in the weed stuff we do in the dividend cafe that's related to investment markets.

Fridays being a bit more high level, philosophical, the core tenets of a free market system that I think all investors need to fall on the sword for. That was the subject to Friday's dividend cafe. I encourage you to check it out if you have not. All right. I'm not going to do much here in the Iran aspect. of things, same-o-samele, same-all. Netanyahu says, no, he's not going to agree to a particular peace proposal that does not adequately disarm Hamas, different things being said by Iran, different things being said

by the president and, you know, the deal. Oil prices were down quite a bit last week, and they were up 5% today, and here we go. On the public policy front, the Senate did take recess. They're gone. They are on their break, but they did vote to fund government by all. almost, you know, a unanimous margin, surprisingly here in a midterm season, through the middle of December. So there's no government shutdown issues pending until after the election. They did not agree to a budget blueprint in the GOP that could potentially set up a reconciliation

bill. They do say they're going to start that up again next month when they come back to work. The Clarity Act, which is this big kind of high-profile crypto regulation legislation that a lot of people in the crypto sector really like and various crypto insiders are pushing for, that also did not get moved for passage. And remember, this will require a 60 vote filibuster proof majority. So we'll see what happens there. I think the biggest news I'm going to be covering here today in the Monday Dividing Cafe is the jobs report that came out Friday. 23,000 jobs lost in July. We were expecting a net gain of 80,000. Worse than the bad month was the revisions of 103,000 lower for the prior two months.

And the unemployment rate went from 4.2 to 4.1, despite bad jobs numbers, because 264,000 more people left the labor force. The one thing I would say is, and I'm going to skip ahead, I guess, to my Fed section now, you know, the Fed did, hike rates at the last meeting, and now you have this kind of weakness in the labor market. It just seems to me to be extremely unlikely that the Fed would be raising rates with this kind of jobs data. Now, all that said, there had been about an 80% chance of a hike. It's down to 50-50. So the odds in the Fed futures market have come way down of a rate hike in September, but 50-50 is still a jump ball, and the odds are still sitting at about 81% probability of a hike by the end of the year.

So, again, a lot of things in flux there. On the housing front, I really want you to pay attention. The latest redfin data showing that in 38 out of 50 states, homes are now selling on average below their asking price. The biggest discounts to asking price are in Florida and Texas. I think it was nine out of 10 of the top. lot 10 markets for largest discount to asking price for closed sales were in Florida or Texas. Now, of course, that's where the run-up had been the highest in the years prior.

Where you're seeing the highest price relative to asking price are actually in New York, San Francisco, and Boston, which, of course, had been less participatory in the big run-up in the years prior. But nationally, 55% of homes were selling above their asking price in 2022. It's now 25%. So just a lot of evidence of the weakness, not just in volume, which we know has been weak for some time, but leaking into price level in housing, that could end up being a good thing if you can see prices recalibrate to a level that allows, some affordability. Okay, I mentioned the Fed market expectations for action next month.

With the three-month jobs average at 20,000, very, very low job creation, it is going back in history only 9% of the time that the Fed has hyped rates when a three-month average of job creation has been at that level in the next six months. And it's 70% of the time that they cut. And so there is a historical correlation to look at. It's only one factor, but labor and job creation being a pretty big one in the Fed's dual mandate, I thought that was worth sharing. Thankful to my friends in Stratigis research for some of the data there. So I mentioned oil was up over 5% today. Midstream was down 2.5% last week, but the total energy sector itself was down five. Horma's headlines obviously driving a lot of this stuff. Oil prices themselves were

down 8% last week. You really did have very strong operating results in the earning season over the last week or two weeks of the companies reporting in the midstream sector. That was probably offsetting it. By the way, oil in our strategic petroleum reserves is now down to 1983 levels. we are below 300 million barrels in our strategic petroleum reserve. Okay, last but not least, in the More to Chew-on section online, you have various links worth checking out if you're so interested. But we always have the Ask TBG section on the homepage at a different cafe. We basically put one or two new questions up every day, not just Monday and Friday.

But one of the questions that came in over the weekend was somewhat critical of me for mentioning in my Friday Dividendon Cafe a couple times, some allusion to my belief in God and some of the kind of transcendent connectivity to my economic worldview and saying it was unnecessary in my economic argument to call upon God and might be bewildering to people

with a different view of God and so forth. I've addressed this a few times that I certainly understand, you know, when I do make a reference, which I don't do a lot, I certainly don't do it as a stretch. Like if I mention something connected to my own faith and belief system, there's usually some pretty obvious connection of the dots going on.

But, you know, the article I wrote in Dividy Cafe Friday was about my economic worldview. And my economic worldview is largely informed by the first principles I believe in, which is going to include many of the things I believe about transcendence. And so I guess all I can say is I write about what I write about because it's my Dividy Cafe and I'm going to write about whatever I want. But I'm never looking to offend or bother anyone. I certainly do respect that some people. may not want to read things, and that's their choice to opt out or unsubscribe or not read.

But in terms of the notion that maybe me mentioning this stuff is not necessary and it might alienate people, so why do it? I do need to say that I don't do it unless I think it's necessary. Arguments I made about economic order on Friday and where there were a couple very, I think, soft references to God in that, I only did that because I think that they were necessary in that particular point I was making. So just thought it worth restating. I appreciated the question that came. It was worded very respectfully, and I think my answer was worded very respectfully, which is the tone and tenor and cordiality we desire to have here in the Dividendon Cafe. But I appreciate you hearing me out on that, even if you disagree. And with all that said, thank you for listening. Thank you

for watching. Thank you for reading the Monday Dividendon Cafe. Brian and I will be with you throughout the week. He and I will be together in Florida a couple days this week. for business. And of course, I will be back Friday in the Divinity Cafe where you will be exposed to my letter to my daughter as she gets ready to go to college. Have a wonderful Monday evening. Take care. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and with Hightower Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered through high tower advisors LLC. This is not an offer to buy or sell securities. No investor process

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