The Dividend Cafe - The DC Today - Monday, April 17, 2023

Episode Date: April 17, 2023

Today's Post - https://bahnsen.co/40b95Ih Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Welcome to the DC Today, your daily market synopsis of the Dividend Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. Well, hello and welcome to the Monday edition of the DC Today. I hope you all had a wonderful weekend. And I hope those of you filing tax returns not in the state of California get everything done today. Of course, I refer to the fact that in California today is not tax day because we had some rainstorms earlier in the spring. So the IRS said the Californians don't have to file or pay their taxes till October in most counties. So there you go. But nevertheless, that traditional April 15th-ish day is coming and going today. And not only is that an exciting day for most people to be on the other side of their tax filing, but it's an exciting moment for us with our own tax services

department here at TBG. Pretty proud of what we've done here this year. Let's talk about what's happened in the market today. And then I'm going to use most of my time today to make a kind of broader point that addressed a question that was presented to me in the Ask David section of the DCToday.com, where I kind of correlated it to the against doomsdayism section of the DC Today. But before we go into that, just the basic market and economic data for the day. The Dow was up 100 points. The futures had been up about 50 all night. It was only up about 20 early in the morning, opened up about 40. So, you know, we were up, but not a lot. And then it did go negative a little later in the morning. So you kind of bounced around a bit, but all within a tight range, anywhere from down 50 to up 50, up 100, you know, something like that. It went kind of negative. And then the last two hours of the day went higher from whatever that negative low point of the day

was to close it up 100 points. And you ended up with the Dow, the S&P, and the NASDAQ all up something in the range of 0.3%. So pretty similar outcome by the end of the day. I think each index may have been off from one another just about three basis points. Real estate was the top performing equity sector of the day. It was up 2.25%. Communication services was the worst performer again, and it was down over 1%. Bond market got hit a little bit. The 10-year yield was up 8 basis points. It closed at 3.6%.

And so you had some bond pricing come down a little bit. But, you know, pretty uneventful day overall in the markets. And we get ready for more earnings season fun coming off of what was a really quite positive day on Friday in the banking sector, particularly some of the mega cap banks that released results. And that surprised some people. In terms of economic data, industrial production came in on Friday up 0.4%. It's the third month in a row now of industrial production being up, but not a lot, but still up three months in a row

after that negative print IP saw in January. Retail sales were down 1%, but still up 2.9% year over year. They're down one on the month. And I would point out that basically all of that 1% drop is somewhat correlated to the lower gas prices and lower spending at convenience stores, gas stations, food marts, that kind of a thing. Not a great retail number, but not a terrible one and not really a big surprise either. Anecdotally, just I like sharing this stuff, Broadway shows right now are averaging 270,000 people a night. That's still below the 300,000 a night that we've seen in April of 2019, a year pre-COVID, but well up from the 220 we were at a year ago. So you just see this real substantial move higher over time since reopening in average ticket goers per night at Broadway shows, but not quite back to pre-COVID levels.

Movie theaters are above and beyond pre-COVID levels. You're now back to high mark for amount of people buying a ticket and going to a movie theater. I'm not surprised on either of these data points. I just think they're interesting to share. Of all the major markets in the country that are, you know, over a million people population and have substantial office area, Austin, Texas is first in the country as far as the percentage of people that are back working in office. And as some of you know, TBG, the Bonson Group, has done its part there as we're opening our office in Austin just in a matter of days. And we've already announced that whole fun project. Houston, Texas, is a very close second. So you have a couple of Texan cities that are right near the top there.

It's Portland, well, primarily San Jose and San Francisco, as far as larger, Portland's a lower population area, but that kind of Silicon Valley area is the lowest as far as workers who have returned to the office. Interestingly, by the way, about Manhattan, I talked about Broadway, their office markets, their people, workers returning to office is up quite a bit, but not quite to the Texas levels, obviously. Rents, however, for apartments in Manhattan are at all time highs. They've moved higher than they were even since the COVID reopening and since the pre-COVID level. And you have 15% new leases that have been signed. I mean, just dramatic increase both in pricing and volume. Very, very low vacancy, basically about two and a half percent vacancy of the apartment inventory

in New York City. So that's kind of the scoop in the economy, scoop in the market today. Someone had written in to ask, do I believe that maybe some of my economic optimism and my attempt to argue against doomsdayism is relying too much on economic improvements and not enough on the social fabric of the country, some of the moral and cultural dynamics, which are, by the way, incredibly important to me. And by the way, not all that separated from a lot of the economic health of a country. I could make an argument that some of the great social, cultural, moral failings of the country in the last 50 years had rather correlated economic byproducts as well. I don't believe that this is an argument against doomsdayism. Rather, I think that there are, first of all, some premises in the argument like when we say this is the most troubled the world's ever been socially. I don't agree. Even the social cohesion in the United States, I think it's pretty bad. And I think it's falling apart. I think it's fallen rapidly from

where it was, let's call it 20 years ago, post 9-11. But yeah, I don't feel comfortable saying that the social cohesion in the country right now is worse than it was in 1860, for example. There are a number of things we could point to that I would agree with the person, including the gentleman who asked the question, but others as well that feel a real despondency or a real panic. Now, I don't panic as a general rule of thumb because I just find it kind of irresponsible. And I don't do, what's the word, avoidance. You know, I think that a lot of the negativity or a default to pessimism reflects a certain pathological temptation that is avoidance behavior, that is a coping mechanism. And so when we refer to just how incredibly bad things are, sometimes things are pretty bad. And there are things I would say right now are really bad and

sometimes worsening. And I think there is an attack on a lot of reality, created reality. I think there is a lot of attack on morality. I think there's an attack on a lot of reality, created reality. I think there is a lot of attack on morality. I think there's an attack on nature and nature's God. And I don't say any of these things lightly. But when I refer to progress from things like, for example, the average life expectancy being 30 years old and now it being 80 years old, that is not something I'm willing to discount or compartmentalize as insignificant. I don't think that Tesla and Microsoft and a couple of hip modern tech companies being successful is the standard I'm looking at and that everything else is getting worse.

I don't think that a few folks who office on Park Avenue are doing better while the rest of the world is doing worse. And I'm just sort of clueless to what's going on out there. I think that a lot of the data points I'm referring to apply to the third world, apply to global realities about less babies dying. And I don't think you're going to come up with very many metrics that are more important than infant birth and mortality going down and things of that nature. When you talk about the propensity to disease, sanitation issues, yeah, I mean, those are relevant data points to anyone who's being either economically minded or morally minded. But my argument is that the elements that we

have right now to deal with in social cohesion and in cultural sensibilities are up against, in other words, the forces of regress, the forces that want to, I think, make for a worse world are up against other forces as well. And I include in that the miracles that stem out of a market economy. I include in that the ability for us to have, if we so want, include in that the ability for us to have, if we so want, a free and virtuous society. And I certainly recognize that some people don't want a free society and some people most certainly don't want a virtuous society. But it is within the confines of a republic that it may happen. And I believe that the pessimists or those who would not only predict harm, but those who would wish harm

upon us probably underestimate what they're up against. Now, we have a lot of things wrong in the culture and society. And I'm pretty sympathetic to people that want to throw in the towel, feel a desire to surrender, assume it's just so bad that it's eventually going to also ravage the whole economy and whatnot. I just don't think they have a great historical argument. I think that generally speaking, everyone who's down about conditions always believes that they're the worst they've ever been, including the people who thought it 10 years ago and 20 years ago, 40 years ago and 60 years ago.

And my job, both in the way that we manage money and advise people, but also my job in terms of trying to be a thought leader who is worthy of the title workman, I believe that it's incumbent upon me to look at the full picture of what's happening in society through a historical lens and recognize that sometimes the most important history is the history people are ignoring altogether. And I do not think that our historical path is as rosy as some make it out to be. make it out to be. And sometimes if you believe you had an overly romanticized past, it makes it easier to think that the present is more doomsdayish than it is. But yeah, I'm against doomsdayism and against where it comes from and what it represents. But I am all for recognizing where there are significant things that need to be dealt with. I just prefer solutions. So there you go. I'll leave it there. That's how I reconcile a general perspective on the economy and history that is still compatible with what I recognize

to be a lot of failures of social cohesion in 2023. Thanks for listening to thanks for watching. Thanks for reading the DC today. We'll see you tomorrow. This is not an offer to buy or sell securities. No investment process is free of risk. There is no guarantee that the investment process or investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable. is believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute investment advice. The Bonser Group and Hightower shall not in any way be liable for claims and make no express or implied representations or warranties as to the accuracy or completeness of the data and

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