The Dividend Cafe - The DC Today - Wednesday, January 25, 2023

Episode Date: January 25, 2023

Dow: +10 points (+0.03%) S&P: -0.02% Nasdaq: -0.18% 10-Year Treasury Yield: 3.45% (-1.8 basis points) Top-performing sector: Financials (+0.74%) Bottom-performing sector: Utilities (-1.36%) WTI Crude Oil: $80.49/barrel (+0.45%) ASK DAVID “This statement in Brian’s response to yesterday’s question caught my eye: “…because inflation is ultimately driven by demand.” I find this interesting because I believe I have heard you say, quite emphatically, that inflation is first and foremost a supply side phenomenon. So is this simply a theoretical disagreement among peers or am I misinterpreting something? ” ~ Mike Inflation, by definition, is one or the other or both. “Too much money chasing too few goods (or services)” – it is an algebraic expression that can have one or both inputs contributing (MV=PT) I believe this recent moment’s inflation (2021-22) was clearly supply-side-driven. The context of Brian’s full paragraph with that one line in it makes clear his view’s alignment with mine. Links mentioned in this episode: [TheDCToday.com] https://bahnsen.co/3Haj3Cb 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. Hello and welcome to the DC Today. It is Wednesday afternoon. I hope you were well served by my partner, Brian Seitel's wonderful discussion and contribution yesterday. And I think you will be by my other partner, Trevor Cummings, his work tomorrow. I'm able to squeeze this in here today, but I literally am just kind of running all over lots of meetings and whatnot here in New York.

And so my time has been a bit limited. and whatnot here in New York. And so my time has been a bit limited. And so I'll just tell you today that it was a very bizarre day in the markets. And basically, the Dow ended up up 10 points on the day, and it had been down not quite 500, but within a whisker of down 500 points. So I think a lot of people want to know why, and I would love to give you a reason. The thing I want to tell you is not to listen to anyone giving you the reason. There wasn't an announcement at the hour and a half point, or let's see, it looks like the bottom of the day happened. Let's call it two hours into trading. autumn of the day happened, let's call it two hours into trading, there wasn't some announcement from the Fed that reversed things.

There wasn't a particular profit announcement. You know, there just sometimes is not an easy, coherent way to make heads and tails of why the market does in a given day what it does. I think the broader narrative is very explainable, which is that we're in a period of elevated volatility around pretty justifiable uncertainty as to whether or not the market is going a certain direction or another one. You do have a vulnerability around this earnings season, we're getting deeper into earnings season, it hasn't quite broken. I hate using this term for a lot of reasons, but it hasn't quite broken in the Darwinian direction that I think it usually does, which is to say, it's not that everything is

going higher, everything's going lower, but you'd sort of get disparate results based on individual results. And some companies can be really rewarded for great revenue growth or great execution or great forward guidance, and others can be punished for declining growth expectations or something like that. It's a little too early yet to detect a particular trend around some of that. But as we get really heavy into further announcements today and through the rest of next week, I think we'll have a better idea. And I suspect that quote unquote Darwinian response will be the case. So the S&P was basically dead flat. The Dow was up 10 points. The NASDAQ was down 0.18%. So a little bit more downside there. It had been down 2% though when I was on Varney this morning at Fox when the market opened.

The clip of that Varney clip, I was on for an hour with him. And so they have a little highlight reel of me talking about a number of different things. If you care about such stuff, that's at the dctoday.com. And always at the Bonson Group's YouTube channel, where all of our videos are archived and where you should be a subscriber. Okay. Financials were top performing sector up 0.74%. Utilities were down a healthy 1.36%. The 10-year treasury yield barely moved. It was down 1.8 basis points, so at 3.45%. We do still have six days, or let's see, now I guess we have four market days left in January.

But as of right now, it's been a month to remember in the bond market with bond prices rising quite a bit. The PCE number comes Friday. with bond prices rising quite a bit. The PCE number comes Friday. That's the personal consumption expenditures that has traditionally been a widely used Fed metric on inflation. And that's more or less it. I think that earnings season is the primary story right now in markets. And we continue to expect days that go up and days that go down and days that go up and down all in one day. And today you got down 500 and up 500 all within a few hours. That's the scoop at the DC today. Thank you for listening, watching and reading.

And Trevor will be with you tomorrow and I will be with you in the Dividend Cafe on Friday. Thanks so much. Cafe on Friday. Thanks so much. Thank you. referenced herein are from sources 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 other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date reference. Such data and information are subject to change without notice. This document was created for informational purposes only. The opinions expressed are solely those of the Bonson Group

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