The Dividend Cafe - Monday - July 13, 2026

Episode Date: July 13, 2026

Today's Post - https://bahnsen.co/4bF0WEu The Monday Dividend Cafe recaps a volatile market day that resembled prior Iran-tension selloffs: oil surged nearly 10%, energy rose over 3%, tech fell over 2%, semiconductors dropped about 4.77%, the Nasdaq fell over 1.5%, the S&P 500 was down 80 bps, and the Dow slipped 138 points, while the 10-year yield rose 6 bps to 4.63%. The host discusses an apparent market leadership rotation (equal-weight beating cap-weight, small cap beating large cap, value beating growth) alongside the paradox of momentum being the top year-to-date factor because “momentum” has shifted to new leaders. He adds new “More to Chew On” links to the written Dividend Cafe and previews a Friday piece on five market concerns and five non-concerns. Key news includes the reported death of Senator Lindsey Graham and escalating US-Iran strikes with renewed Strait of Hormuz closure and US blockade claims. He notes June existing home sales fell 2.4%, contrasts mortgage rates and home prices versus 10 years ago, summarizes new Fed task forces, and highlights differing views on rate hikes with futures implying a 90% chance of at least one hike by year-end. 00:00 Market Open Recap 01:11 New Links Section 02:20 Friday Feedback 02:52 Rotation Versus Momentum 05:45 Rates Oil And Sectors 06:09 IPO Mania Warning 07:35 Headlines And Iran 09:00 Housing And Fed Outlook 10:57 Wrap Up 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 Dividend Cafe. I am going to do our normal around the horn, go through a few topics. It was a very interesting day in markets. If one didn't know better, you could say it felt like a few months back where Iran tensions were going higher. was up 10%. Nasdaq and tech were getting hit and energy was up. Now, there were a lot of days where the Dow had actually been up and the NASDAQ was down a lot. The Dow ended up being down today, 138 points, just a quarter of a percentage point. Although it did open up with S&P and

NASDAQ down, but it lost that meat in the first hour and then kind of stayed flat for the rest of the day. But you had the NASDAQ down over one and a half percent. You had the S&P down, 80 basis points. You had the Dow, as I mentioned, down just a quarter point. However, semiconductors were down almost 5%, 4.77% as an index. So it was definitely one of those days that bifurcated and we had plenty of days like that a few months back and it kind of reverted to that form today. Let me first of all tell you, before I get deeper into the market summary, that in the written dividend cafe.com, I have decided to quit holding back on you all. There are so many, I'm not going to be putting in links in Dividendon Cafe to the amount of

research that I read Mondays, Fridays, throughout the middle of the week, over the weekend. It is 100 pages a day, and I would never burden you all with that. And a bunch of it you would get firewalled out of anyways because the majority of the research I read is institutional subscription base. However, every now and then, I come across some fun stuff or inspiring stuff or informative stuff or just interesting that is not behind a paywall. And I want to start sharing some of those things with you. So I'm adding a section that I'll do every Monday in this Dividy Cafe format and then on Friday in the main weekly called More to Chew on. And I'll just put a few links in there. So you video watchers and podcast listeners aren't going to get those links.

a way that the people are reading the written Dividend Cafe will, but at least I'm telling you about it, so you can go find them if you want. All right. The Dividing Cafe on Friday, a lot of feedback over the weekend, greatly appreciate it. It's just amazing how positive the feedback is

when I don't say anything about President Trump, but the subject matter was a theme in investing. I'm seeing more and more of from smart and institutional investors wondering what 19-year-olds and 23-year-olds are talking about, I'm thinking about. And I wrote a Dividy Cafe commentary on that whole mentality. And I think you'll find it interesting. If you missed it on Friday, please check it out. As I mentioned, markets down today, the paradox right now, as I see it, is that everyone, including myself, is talking about a rotation in leadership in the market. And it is an accurate talk. Equal weight is beating cap weight in the

S&P 500. Small cap is crushing large cap of value. value is beating growth. The sectors that were down last year have re-rated. A lot of the sectors that were up last year are down more this year, not all perfectly inverse, but there's these kind of rotational changes in various leadership elements of the market. And yet the paradox is that the factor that is so far leading in terms of investment, what this means is a kind of way of measuring stocks around a particular characteristic. And there's a bunch of these categories, and we refer to them as factors that either maybe going up or going down or what have you.

And you can look at value, quality, a yield. You can look at growth characteristics, volatility characteristics. Of all these different factors, the one that is up most year to date is momentum. And you don't normally think of momentum. hitting the lights out in a period of rotation. There's actually a prima facie contradiction to that because by definition, momentum means that which was going up has momentum and is still continuing to go up.

And so a rotation would suggest that there's been a disruption to momentum. The issue is that what has momentum has rotated. And so now you're seeing, it's a worthless description. in that sense because what had momentum doesn't and then something that is new as momentum that sort of changes the definition a bit but it is not the things that were momentum success stories last year now here's the thing i would say by definition momentum investing is rooted to this idea that many people have that what just got done going up is the thing that will next be going up. And I consider it one of the dumbest things that I've ever heard. And not just as a

professional investor, but just intuitively, there's nothing about it that makes any sense to me. But the problem is that belief has a lot of momentum right now. And I'm purposely trying to be cute there. But it will continue to until it doesn't, just like momentum investing, which is why as a description of what has happened, it's great. And as a prescription, for what will happen, it is not. Okay. The bond market today hit the tenure up six basis points to 4.63%. And that was largely correlated to what was almost the 10% move higher in oil prices.

Energy was up over 3% on the day. Technology was down over 2% of the day. So it was just one of those days in markets. I want to read this line before I move on to give you a little feel. and you notice that this SpaceX IPO has been getting hit pretty hard. But I don't share this as a comment on SpaceX Pro or Con forward or not forward. I wrote a divvind cafe a few weeks ago about IPO mania that captures what my bigger concern is, which is an investment sentiment that I don't think is totally healthy.

But how do I say this nicely? I don't know that there is a way. This line from an analyst captures so many things at once and I don't think I'd need to give a lot of additional comment. We forecast no free cash flow positive year before 2035. By the way, it's 2006 right now. And average external capital needs are roughly $84 billion from 2020. to 2034. If debt markets cannot absorb this financing need,

the company may need to issue equity, reduce growth investment, or slow deployment. There's so many captain obvious things in there. I don't know where to start, and there's just, I just kind of think it's one of those paragraphs that ought to speak for itself. Top news stories, I do want to report the Senator Lindsay Graham of South Carolina,

Carolina, shockingly died Saturday night, age of 71, cardiovascular disease leading to aortic disruption that took him quite quickly. Senator Graham had been in the Senate since 2002. He'd been in the House since either 92 or 94. And now, just before I was recording, it was announced that the governor has announced Senator Graham's surviving sister to be his replacement. And I have not been able to read up on that or whether or not they would actually run her for the full term after this interim term ends. But it's just you can dislike Senator Graham or you can like Senator Graham, but really a tragic story.

And I'll leave it there. The major news story, though, in terms of what investors are probably focused on, is the escalation of strikes, such in the U.S. and Iran, Iran saying the straight of her moves closed again, the U.S. saying we're reinstituting our blockade. Oil prices had mostly shrugged it off. and then now today jump 10%. And we'll see if the blockade really holds in the days ahead. On the policy front, there is supposed to have been meetings today.

I have not heard from any of my sources if they happened or what happened about House GOP leaders, again, meeting with budget committee leaders to try to see what a path to another reconciliation package may be. And I will keep you posted. Existing home sales declined 2.4% in June, both single and multifamily sales volume were down. Ten years ago, the average mortgage rate was three and a half percent for a new home. Right now it's six and a half percent.

Ten years ago, the average home was, the median cost was $350,000. Now it is $540,000. So you have prices up, something in the range of 65, 70 percent on a median basis from 10 years ago. and cost of borrowing that is almost double. There you go. The Fed announced late last week, the members of the various task forces that the chairman has appointed.

Chairman Warsh created a communications, balance sheet, data, productivity and jobs, and inflation framework task force, five different task forces. There was a combination of business leaders, economists, academics, some central bankers,

former central bankers. And I was, really quite impressed with some of the names that got in there and will wait for further comment. There is a lot of different opinion about what the Fed is going to do. My dear friend Renee Annau of Corbu, one of the great macroeconomist I know and really someone I hold in the highest regard, both personally and professionally, very much believes that they will be raising and they will raise quicker and more than people believe. You know I've been in the camp that does not expect him to hike. I never take lightly when Renee and I are on different sides of an issue, which doesn't

happen very often. And I hold his opinion in very high regard. That's all I have to say about that. But again, the futures market is very much on Renee's side. You have a 90% implied probability right now of at least one rate height by the end of the year. Oil closing of $78 today, effectively up over 9%. And then somebody did ask why TBG is of particular interest with midstream. energy. And I answered the question at Ask TBG, which is it's in Dividedain Cafe today and it's also on the homepage of Dividendoncafe.com. I'll direct you to the further links in our first ever appearance of more to chew on. And I look forward to writing a Friday Dividing Cafe this week, about five things going on in markets I am concerned about. And five things going on I'm not

concerned about. That will be the subject to this Friday's Dividy Cafe. In the meantime, reach out, as always with questions. Thank you for listening. Thank you for watching. Thank you for reading the Dividend Cafe. The Bonson Group is a group of investment professionals registered with High Tower Securities LLC, member FINRA and SIPC, and with High Tower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through High Tower Securities LLC. Advisory services are offered through High Tower Advisors LLC.

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