The Dividend Cafe - The DC Today - Thursday, July 20, 2023

Episode Date: July 20, 2023

Today's Post - https://bahnsen.co/44yThlA It’s hard for contrarians to like some of the sentiment out there, with “bulls” at their highest level since April of 2021 and bears at their lowest level since June of 2021. The greed/fear index is tilted way towards the “greed” side of things and while it feels good to some, we like it the other way. Earnings season has started off well across the market, broadly speaking, but Tesla and Netflix were the first two mega-cap “name brand” companies to buck that trend this season, getting hit hard today (though still way, way up on the year). 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 Thursday edition of the DC Today. I am very excited to be with you from beautiful East Hampton, New York. I'm very excited to be with you from beautiful East Hampton, New York. I think that it was a quite interesting day in the market, and I want to give you a little rundown and, of course, get you all excited for Dividend Cafe coming tomorrow. Bottom line is that the Dow ended up being up 164 points today, and yet the NASDAQ was down over 2%, which I think may have been the worst day of the year in the NASDAQ. I didn't look it up though, but I mean, it's near that. You had consumer discretionary down 3.5%. Just today alone, communication services down 2.5%. Technology was down over 2%. And at the same time, you had more defensive sectors doing quite well. Utilities up 1.85 percent, healthcare up 1.65, and energy was

up 1.3 percent. So it was a very bifurcated result. Kind of not just an up day in the Dow, but a good up day, and not just a down day in the NASDAQ, but a real down day. And that of course was very 2022 like. You have not seen a lot of that bifurcation this calendar year much. The primary cause, by the way, is somewhat irrelevant. It was really heavy weightings around two major names in both NASDAQ and to a lesser degree in the S&P, Tesla and Netflix. And they got hit pretty hard today around their earnings results that came out yesterday. And I have a link about Tesla and Netflix in the DC Today about that news event. But more relevant to kind of our purposes, you just simply had a very high dispersion of results across the market.

I think that is a more healthy market when the markets are kind of moving based on the underlying ingredients of their constituents, not just all up together, down together. That sentiment that when it can really drive all markets higher, I actually don't care for. And that's what we've seen a lot of lately. In fact, I'm a contrarian, so I follow investor sentiment very heavily. And the bull bear sentiment, you really got to the highest level of bulls in some of these surveys that we follow, an aggregated indexing of retail investor sentiment and the level of people identifying as bulls got to the highest since April of 2021. And the level of bears got to the lowest level rather since June of 2021.

So over two years of low bear level and high bull level, okay, reflecting a lot of optimism in the market. And again, just so you don't think you're hearing me wrong, I'm saying this correctly. I view all that feel goodedness as a bad thing. And when everyone is a lot of feel baddedness, I think is a good thing. And DC Today is my podcast and I can make up words whenever I want. Okay. What else do I want to cover about today? The 10-year, all bonds sold off, yields moved up quite a bit.

The 10-year is still at 3.85%. So it had sold off 30 plus basis points in the last several weeks. You had a big rally in bonds. But today it moved higher. The 10-year up 11 basis points to 3.85. Oil was up another half a percent. It's still staying there above the $75 mark per barrel, closing at 75.70. But initial jobless claims fell to 228,000 on the week, the weekly jobless claims.

It had been at a 254,000 average that has now come down a few weeks in a row after having gone up a few weeks in a row. And that's taking out a lot of this sentiment that was wondering, like, oh, is the job factor about to get worse? Because, of course, you know, in the bizarro land that is 22 and 2023, bad news is supposed to be good news, and good news is supposed to be bad news. And people were getting worried that the, excuse me, people were getting happy that the job numbers were going in the wrong direction. And they've actually kind of seems to leveled out and in fact, improved a bit, at least as far as initial unemployment claims go on a weekly basis. I also want to point out existing home sales came in 40,000 less than expected last month. This is the lowest level of sales volume for existing homes,

not total homes, but it's the lowest level of volume since 2011, median home prices across the country year over year were down 1%. And with no transaction volume to really validate the price level, I wouldn't read too much into that. But where transactions are happening, you still are seeing multiple offers and a full third of deals that did close, which again was not very many, but a third of deals that did close, closed above the asking price. So it's a very mixed bag. There's not a lot going on, but where it is, prices are not collapsing. And in fact, it's still kind of a softening, but reasonably healthy market. And yet with just most people in a wait and see mode about housing, more and more data kind of verifying that all the time.

So that's the basic update here in the market. I won't leave it there. I won't go beyond there. I do want you to read the DCADay.com. David, wondering my view about how we look at certain things having to do with electric vehicles and particularly company news that might affect our dividend growth perspective. I think you'll find the answer interesting. And I'm very excited about tomorrow's Dividend Cafe, which will be delving into the subject of on-shoring, off-shoring, re-shoring, near-arshoring American jobs, particularly manufacturing, our relationship to

the supply chain, and what some of the investment impact and economic perspective on that whole subject is. It's a lot more exciting than it sounds. So check out Dividend Cafe tomorrow. And thank you, as always, for watching and listening and reading the DC Today. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, with Hightower Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered through Hightower Advisors LLC.

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