The Dividend Cafe - Monday - March 30, 2026

Episode Date: March 30, 2026

Today's Post - https://bahnsen.co/4dTkNSp The Monday Dividend Cafe recaps sharp intraday volatility as the Dow finished slightly up while the S&P 500 and Nasdaq closed down, with financials and utilities outperforming and industrials and technology lagging; the Nasdaq is down about 10% since the recent selloff began and many “Mag Seven” stocks are down over 20%, alongside steep declines in bitcoin and other high-risk names. David describes a broad risk-off posture intensified by the Iran-related military situation, notes WTI around $104 (up roughly 50% since the war began), and highlights relative strength in energy, midstream, refiners, and other commodity-sensitive areas. Bond yields remain elevated but the 10-year fell about nine basis points to 4.35%, and he argues long-end term premium is likely too high. He advises against disrupting a coherent investment plan amid uncertainty, covers brief policy updates (DHS funding, a 401(k) private markets rule proposal, David Sachs leaving his crypto/AI role, an Anthropic-related court ruling, and Fed futures), and previews an energy-focused Dividend Cafe later in the week. 00:00 Market Whipsaw Recap 00:48 Risk Curve Reality Check 01:59 Bonds Yields and Term Premium 03:25 Sector Winners and Losers 04:18 Stay the Course Investing 05:48 War Headlines and Uncertainty 06:37 Policy Updates and 401k Rule 07:56 Housing and Fed Odds 08:39 Oil Midstream and Wrap Up 09:03 Closing Notes and Week Ahead 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. We are in the midst, you may have heard, of some pretty fascinating intraday market volatility. And today was no exception. The market opened 350 points in the Dow. It closed up just 50. The S&P and the NASDAQ both opened up quite a lot to the upside and both closed down on the day. The S&P was down about 40 basis points.

The NASDAQ was down about 75 basis points. The Dow being up 50 points meant just over 10 basis points. So a tiny upside in the Dow. A very good day for financials, for utilities, a very bad day for industrials and again, technology. The NASDAQ is down about 10% since this whole escapade began. S&P is right behind it. Most of the MAG7 stocks are down well over 20%. Some are down over 35.

Bitcoin is down 50%. Some of the Ponzi-like Bitcoin stocks are down 75%. I bring that up just to say that there's a sort of risk ecosystem. And as you go up that risk curve, the violence of the downside is more severe. Even within the AI story, you look at something like Nvidia that's down over 20%. You look at Palantir that's down 35, and then you look at CoreWeave that's down much more. So as you move out the risk curve, some of these names have taken on more downside. It's a risk-off posture we're in, no question, at least for the time being.

And it's made the highest valuation stocks the most vulnerable. I'm not convinced all of this is an Iran story. I think a lot of this clearly started before that, but obviously the military operation is exacerbated the general riskoff's feeling, and it's democratized it across other sectors of the market. The 10-year bond yield closed today at 4.35%. So that was an upside, and that's why some of the rate-sensitive sectors, utilities, financials, I mentioned, et cetera, did better. But the bond market today had one of its bigger rallies since this began. The 10-year alone was down nine basis points. But that shows you how high it had gotten almost up 50 bips since the war began. But again, giving a lot of that off today and causing bond prices to rally. Of all the predictions that I refuse to do, and there's plenty,

I think that the one I guess I feel most confident staying, even though I won't apply specific timing to it, is something you saw a little bit of just today. But that's at the long end of the yield curve has been too high. The term premium that exists between the short end and the long end is just simply unlikely to last. And I would imagine it will take some clarity and stability in oil prices. It will take some clarity and stability in the overall war trajectory to see this stabilized. But I do think it will happen.

The short end is a different story, obviously very Fed-dependent, headline inflation-dependent, but real growth in the economy is just simply. not good enough to warrant a four and a half percent tenure as much as I wish it were. And so that spread between the short, the Fed Funds rate, and then the tenure has gotten to be too high. Overall, I don't think it's a surprise to say that the things that are performed best in this moment, commodity sensitive stocks, commodity producers, railroad stocks that are now having to transport a lot of coal, some of the refinery stocks. Midstream has done very well. I'll talk more about that in a moment, but energy and energy adjacent sector positions have done well.

And obviously, that rates sensitive stocks have done worse with that move higher in yields. And so the reits and utilities and financials have struggled until today. To me, rates going higher, you could say as a surprise, because you expect treasury bonds to rally in a sort of risk-off environment. But it isn't as big a surprise when you think about how oil prices have moved so dramatically, over $100 a barrel on WTI where we close today. I think the takeaway I'd suggest people have here as we get ready to go into the fifth week in the market since this all began is that there is not really a clear case in any

element of this, bond stocks, riskier sectors, more defensive sectors for disrupting what hopefully was a cogent investment plan entering. it. First of all, many things that seem like obvious investment implications are not so obvious after all. Consensus is wrong constantly, and there's been plenty of consensus expectations in this period that have proven to be wrong. But second of all, many things that you could say are obvious and have come together have already come together. They've already materialized. That's the whole point. So going to pile into these things four or five weeks later seems to me to be a fool's errand And here's what has stayed steady.

You can say a lot of things are down over the last month, and they are. We'll see where things close out for the first quarter of 2026. Tomorrow is the last market day of the quarter. But the relative performance of even weight over cap weight, a value over growth, of the rest of the market against Mag 7, all of that is continued. And albeit with a marginally negative absolute performance, but a pretty substantial continuation of a relative positive performance. I won't get too much into some of the Rand War updates.

We know President Trump tweeted that there's been significant negotiations that he said, and I quote, we're in serious discussions with the new and more reasonable regime, end quote. And they can deny that they're meeting and that other people say they are and we know Pakistan is involved as some sort of intermediary to some degree. We don't know what U.S. intentions are with Carg Island. We know a lot of troops are being moved to the Gulf as we speak. So I'm not going to get into what will happen here. It's clear what different options the president's setting for himself.

But there is the uncertainty of what is going to happen, the uncertainty of what he's trying to see happen, and the uncertainty of how markets are going to respond to it. And I think people trying to game out where that goes, it's not going to go well for them. So public policy-wise, they did. basically get funding for TSA employees that is supposed to address the lines, which appears to have only been an issue at certain airports.

A awful lot of airports don't seem to have been going through that at all. But the overall DHS funding stall does continue. The home on security funding issue and partial shutdown is not yet resolved. The Department of Labor released this morning, their proposed rule, there's a link in Divida Cafe today to enhance private market access within 401K accounts. David Sacks, the Silicon Valley billionaire, who has been President Trump's self-declared czar of crypto-NAI policy. He is now leaving that role, and we'll see who replaces him there. A federal judge ruled last week that Anthropic, they basically blocked the Pentagon's attempt to label Anthropic as a national security risk and a supply chain risk.

But the Trump administration's appealing the ruling, so there's still. more going on there. There's a lot of implications around that that I will be covering. That's anecdotal to things. I don't know exactly what's going to go. Maybe I'm getting happy before I should. But the word is that President Trump is about to withdraw his nominee, Casey Means for Surgeon General, something that would make me very happy if he did. Housing side, not a lot to report as mortgage rates have certainly moved higher in the last week or so. and the traffic perspective buyers for new homes continues to look very, very low. Right now, futures are implying a 79% probability that the Fed Fund's rate stays the same for the rest of the year.

And then there's a kind of 7% chance that it goes a quarter point higher. I find that highly unlikely. Only a 14% chance that it goes a quarter point lower. I also find that very unlikely. I do still suspect that they will end up cutting when Kevin Warsh is in. But right now the futures are definitely suggesting different. WTI closed $104.19 up another 4.6% at this point, basically up about 50% since the war began. Midstream last week, a very positive week in what was obviously another negative equity week.

Midstream was up over 3% on the week. It's now up over 25% on the year. S&P was down over 2% last week. So what else I want to cover? I'm going to leave it there. I have to run to a dinner meeting, and I've covered a lot already. Please do read the AskTBG at our homepage at our homepage of Dividentcafe.com, and feel free to send your own question for Ask TBG anytime.

And in the meantime, we will be entering the second quarter on Wednesday of this week. Clients, as always, will receive their weekly portfolio holdings report Wednesday morning. Brian and I will be with you each day this week for our daily recap. And if you have any questions, reach out, questions at the bonson group.com. The Friday Dividendon Cafe is going to come on Thursday because Friday is the good Friday holiday going into the Easter weekend. And so I will be doing a divinity cafe dedicated to the energy discussion. The energy sector, both with and without Iran, covered this coming Thursday.

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