The Dividend Cafe - The DC Today - Tuesday, April 2, 2024

Episode Date: April 2, 2024

Today's Post - https://bahnsen.co/3JnoIqp Although off the lows for the day, stocks closed down for a second day to start off the new quarter. 10-Year yields have now moved back towards the high end of their four-month range at 4.35%, which is about the level where we have seen markets start to pay more attention which is what today was about. Fed futures are still at 50/50 for a June cut and roughly 70% for July, and what’s being repriced into markets is rates that may stay a little higher this 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. Welcome to DC Today, this Tuesday, April the 2nd, in what ended up being a second down day to start off April in the second quarter. Yesterday, I thought maybe it was just April fools. It turns out it's going to have some follow through. But the market was off the lows for the day. We closed down 396 on the Dow. Really what drove this is rates are at the higher end of their range. The 10-year is trading at

about 436. It was up three basis points on the day, but that was after it rose 12 basis points yesterday. And so the markets just in risk assets are repricing some higher interest rates. But what's behind it isn't necessarily bad. It's, yeah, some inflation numbers have remained in the high twos or low threes, but are definitely moving in the right direction. But it's positive economic growth and labor strength. And those things aren't bad. If we end up with repricing because we're going to have a little higher interest rates the remainder of the year, that doesn't frighten me too much, per se. But we had yesterday, again, positive manufacturing data that was good for economic news. We had today some positive numbers out of job openings.

They were the same. It was 8.8 million this month, which was really for February. And then we had about the same exact number for the month before in January. So those are good numbers. It's a healthy amount of job openings. That's a good sign for the employment market. It's down from 12 million in 2022, which was the peak. So it's come a long way to normalize at this point and now is sort of stabilized around these numbers. And I don't think that's either a bad thing as well. So we had the section in there, David had a section in there about the energy sector and some of the differences in different periods of time, alluding to the 15 and 16 period where energy was just sort of hated. And then even in the 20 period, 2020 during COVID, oil futures were trading negative and just different periods

of time where energy was perceived one way or the other versus this sort of redemption period post-COVID where now you have energy doing well when stocks are doing well. So if markets are up, for example, in 2023, energy was up as well. But it was also up when stocks were down. When the S&P was down in 2022, energy actually was a big outperformer. So you just have positive fundamentals in that market. The price of oil has stayed relatively stable in this sort of mid-80s level. And because of those previous years of over capital expenditure in 15 and 16, you just have a really much healthier energy sector as far as those companies go. And those are all good things. And obviously, we're believers of some of those businesses, particularly in the midstream pipeline space. Factory orders for

today were stronger than expected in some rebound from two months of negative. We were up 1.4% for the month of March. So good to see those things. That's positive for the economy positive for the economy, and so on. The Ask Brian section was responding to an astute question, and I hope my response sounded respectful, I suppose. I meant it to be, of course. But it was a reader that was commenting on something else he had read about this being the sort of definitive second top to the biggest bubble in U.S. financial history and kind of thought, wanted to ask me what I thought about that. There's not a lot for me to really reconcile with those types of statements. You know, it's not to say good or bad about the person who wrote it, I sense, but, you know, they're written that way because it grabs headlines, it grabs

eyeballs, it grabs clicks, it grabs readers. It's more about that than it is about trying to offer you some sort of insight into how to help you design a portfolio or what you should do around those sorts of things. You really can't plan too well for the sky is falling type of thing. And of course, the future isn't predictable, it's unpredictable. And so we try to control or focus and spend our time at the Bonsinger focusing on things that we can control, analyzing companies from the bottom up, making sure client asset allocations are correct, things like this. So I don't have any more comments about the sky is falling other than that to say, other than I don't think it is. So there you have it. And actually, before I let you go, I wanted to give just a little mention that today, April 2nd, 2024, is the now ninth anniversary of the Bonson Group leaving Morgan Stanley, where we previously were, and moving out into our new fiduciary independent paradigm and building what is now the Bonson Group that you know of today. And it was, you know, it's, I remember there was an hour or so of unemployment for David and I

when we left Morgan Stanley before we started the new gig. But it's just been surreal, this amazing journey. And I'm just so thankful and grateful for the now 60 people. At the time we left, we had David and I plus six others. So there was eight people on the team and roughly 600 million or so in client assets. And now it's 60 people and 5.3 billion showing up on my screen every morning. It's quite surreal. But today's the ninth year anniversary. I just wanted to say thank you to all on the team. I'm so grateful.

And to every client that's listening and for all your support. With that, tomorrow we've got some ADP private payroll data that comes out. And some ISM services data that will come out. So there'll be lots more to kind of go through with you tomorrow. And I look forward to it. Reach out with your questions. Thanks so much. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC,

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