The Dividend Cafe - Monday - December 1, 2025

Episode Date: December 1, 2025

Today's Post - https://bahnsen.co/3Xtosgp Market Updates, Bitcoin Correlations, and Policy Discussions: Post-Thanksgiving Report In this edition of Dividend Cafe, we recap the recent market activity and its fluctuations following Thanksgiving. Key points include the Dow's drop of 427 points, mixed performance across major indices, and a significant contrast between top-performing and worst-performing sectors. We also highlight Bitcoin's recent correlation breakdown with the Nasdaq, the potential economic impact of Japanese bond yields on cryptocurrencies, and the ongoing foreign appetite for U.S. financial markets. Additionally, the episode covers updates on the Russia-Ukraine war, Affordable Care Act subsidies, significant upcoming Supreme Court hearings, and notable figures in the Federal Reserve's future. For detailed charts and more information, visit DividendCafe.com. 00:00 Welcome and Market Recap 01:05 Market Indices Performance 02:41 Foreign Appetite for US Securities 03:51 Bitcoin and Cryptocurrency Insights 05:51 Geopolitical and Policy Updates 07:40 Economic Indicators and Housing Market 08:38 Federal Reserve and Interest Rates 09:46 Energy Sector and Predictions 10:12 Conclusion and Upcoming Topics Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing 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 Dividendon Cafe back in the swing of things, kicking off the month of December after Thanksgiving week. If you did miss the Dividendon Cafe, middle of last week before the Thanksgiving holiday, we did a special Thanksgiving version. the dividend cafe, you're welcome to check out at dividendcafe.com. For those who just want to get right back into markets, we're going to go around the horn here today. We'll do it pretty quickly, although we do have a little bit of information in each category that we like to cover here on Mondays.

First of all, let me just say, as far as today's market action, we opened down 200 points at the beginning of the day, and then zigged higher, then went lower, then zigged back higher, then went lower, up and down 200 points. or more a couple times throughout the day. But the Dow closed pretty well near its low of the day, down 427 points, which was a little less than 1% to the downside. The S&P 500 was down a little bit more than half a percent.

NASDAQ down. 0.38%. So all three of the market indices down, but that was after a pretty big rally last week, albeit in a three and a half day market week. The S&P 500 in the month of November had been, been down 5.2% from its intramount high to its intrammonth low. And it closed up on the month. I mean, barely. I think it was 0.13% that the S&P ended up. The NASDAQ was down.

But you did have a pretty meaningful move higher markets late last week. The Russell 2000, the small cap index, was at one point down 7% in November. And its rally late last week actually saw the small cap space go higher on the month. It ended the month in positive territory. I would point out too, just because we've had this ongoing discussion about concerns over breadth in the market that the even-weighted S&P 500 and the Russell 2000, which of course covers smaller cap companies, they're both at all-time highs or were coming into today. Now, that said, it's 62% of stocks. Let me make sure I have that number correct. Sixty-two percent of stocks in the S&S. P-500 right now that are above their 200-day moving average. So that is not huge, that is not

robust, that is not something that indicates a lot of positive momentum, but it's above 50%. I mean, it's still a certainly decent breadth number and does not in any way indicate a real internal deterioration taking place in markets. Another narrative that comes up a lot about deterioration markets or internal concerns or what have you is a foreign appetite for U.S. securities, whether it be sovereign debt, treasury bonds, or equities. And again, this is another story where there was a big hiccup in foreign appetite of U.S. markets post-liberation day. And that was for good reason at the time, both the narrative and the actuality of what appeared to be a pause or hiccup. But it just did not last. And we are now dealing with a very robust resumption.

of foreign appetite for U.S. financial markets. And whether or not that persist into 2026, I think is going to end up being a very big story next year. The 10-year bond yield closed today at 4.09% up 7 basis points on the day. A little sell-off here on the long end of the curve, but certainly what has been a rally in the bond market as of late. Energy was the top-performing sector today. It was up almost 1% on the day.

Utilities were down almost 2.5%. a half percent on the day. So you had a pretty big contrast between top performing and worst performing sectors within the S&P today. There's a charted dividend cafe today that I encourage you to check out showing the correlation between Bitcoin and the NASDAQ. And it's a narrative I've talked about for some time that really Bitcoin far from trading like a safe haven asset has actually traded much more as a risk on asset in a really, really tight correlation to things like the NASDAQ. And that has fallen apart here in the last month where you've actually seen quite a

disconnect between NASDAQ and Bitcoin. And so whether or not the NASDAQ and Bitcoin are still liquidity-driven assets and some of that liquidity rally is gone, we'll see. But I would encourage you to look at that chart and see what I'm talking about, that as the NASDAX had a bit of a sell-off, Bitcoin fell over 30. So that correlation may be breaking apart. And of course, there's a heavy leveraged ownership of Bitcoin attached to this. And in fact, it brings you to another point.

There's a lot of question as to whether or not rising Japanese bond yields are undoing some of the yen carry trade. And if that's bleeding in to the crypto or Bitcoin space, and it's not that I think the answer is no, because I think it is very likely, true marginally. But I'm just very skeptical of any narrative that is conveniently used for everything. It can't always be a catch-all that is there to explain every single risk asset move as something to do with the yen carry trade. Are there Bitcoin buyers that are levered using borrowed yen?

I'm sure there are, and I'm sure it doesn't help, but I'm not sure that that is the story here entirely. By the way, that will be the topic of Dividen & Cafe this Friday, not the yen carry trade and leveraged buying of Bitcoin, but the overall story around Bitcoin and credit. crypto and why we at the Bonson Group do not own it and never will. So moving on to some of our other topics, big news story that we hope will be playing out and we'll see where it goes, the Russia-Ukraine war discussions, the special envoy for the U.S. D. Wyckhoff is on his way back to Moscow as we speak to meet with Vladimir Putin.

There continues to be back and forth up down and we'll see where it all goes. My read of the situation and in talking with certain sources whom I trust a great deal is that things are closer to a potential deal than they've been, but nowhere near close to being complete. So we'll see how that plays out. Public policy side, a lot of discussion going to happen in the next few weeks around the subsidies of the Affordable Care Act that were expanded during the post-COVID moment and what is going to come of those, which are set to expire here at the end of the month. My expectation continues to be that the president is willing to extend those subsidies. There's definitely a majority of Democrats that want to see them extended, but that the president in exchange for extending it is going to want certain tradeoffs and we'll see how that plays together.

The Supreme Court, by the way, will be hearing arguments one week from today on what I think is a pretty significant issue, which is whether or not the president had the authority to fire the federal trade commissioner, the FTC head. this isn't just about FTC related matters, although there are a lot of market repercussions that are directly connected to FTC, but just the overall use of executive authority and the relationship between the executive branch of government and various administrative agencies that have questionable constitutional oversight, this could have more tail to it than just the actual case itself around this FTC commissioner has been terminated.

ISF manufacturing for the month down again, lower than it was even last month. I believe we're now 34, the last 36 months. The manufacturing has been negative indicating contraction. You had 14 of 18 industries in contraction this most recent month. On the housing front, Redfin came out with the report over the weekend that the month of September, so the highest number of delistings, sellers that had listed their market for sale and pulled their home off of the market. The highest number of delistings in over eight years, a 28% increase in delistings from the same month a year ago. That's 85,000 sellers that had listed

their home for sale and unlisted it. That, again, speaks to what we know of this sort of frozen market and large disconnect between sellers and buyers that is currently the lay of the land. We are now dealing with an 86% probability implied in federal funds futures markets for a rate cut in the month of December. We had been basically around 90% a month ago. It got all the way down to 30% after the Fed meeting a month ago and then has now come all the way back to 90% with several significant Fed regional president's job boning, the idea that they do want to have a rate cut.

And, of course, there's been plenty of soft economic data to support that. This is supposed to be the final month of quantitative tightening QT, based on various liquidity issues we're seeing in the repo market. I wouldn't be surprised at all to see the Fed actually expand their balance sheet, but their announced end of decreasing their balance sheet is this month. By the way, I'm not happy to say this. He's most certainly not my choice, but the prediction markets right now have. Kevin Hassett is the current National Economic Council Director at 79% odds of being named

the new Fed chair. When the president names his person in the next month or two, even though it wouldn't be going into effect till May, the president's expected to announce his chosen candidate sooner than that. Oil up 1.5% on the day, closing at $59.50. Rig count down to 407, the lowest it has been in the U.S. in September of 2021, over four years ago. Midstream, by the way, midstream energy was up five and a half percent in the month of November. It was up about 2 percent last week. Midstream had been down three months in a row before, so he had a bit of a rebound in November. Go to dividend cafe.com for our AskTBG, somebody asking what we expect about the duration of the Fed's bond portfolio in today's question.

I'll let you go to dividend cafe.com to see that. And I'll be with you throughout the week, our normal daily recap and what's on my mind and all those kind of fun things. And then we'll have Dividend Cafe on Friday dealing with the Bonson Group's approach to Bitcoin or lack thereof. Do hope you had a wonderful Thanksgiving weekend.

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