The Dividend Cafe - The DC Today - Wednesday, July 19, 2023

Episode Date: July 19, 2023

Today's Post - https://bahnsen.co/4796XFZ David Bahnsen is traveling today and I, Trevor Cummings, will be filling in to provide you with the daily happenings around markets on this beautiful summer day. The market hit a 52-week high, the Dow is on its longest win streak (8 consecutive days) since September 2019, headlines were captivated by a slew of corporate earnings reports, we have new housing starts data, and of course the best part – Ask David. Please join us for all of this and much more. 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. Hello and welcome to DC Today. I'm Trevor Cummings filling in for David Bonson. You should really invite me here more often because I must be really good luck. The market hit a 52-week high today. The Dow Jones had eight consecutive days of positive performance. It's the first time since 2019. It must be because Trevor Cummings is doing DC today. So the Dow was up 108 today. That was 0.3%. S&P was up 0.24%. NASDAQ was up 0.03%. The 10-year finished the day at 3.74%. That's down four basis points on the day. Top performing sector of the day was real estate, which was up 1.12%. The bottom performing sector was materials, which was down 0.52%. Oil at $75.27 a barrel, and it was down 0.63%.

That gives you a good idea of what happened today. Again, like I said, it was a 52-week high for the markets. That's eight consecutive days for the Dow Jones Industrial Average. Again, first time since September of 2019. So investors are happy today. You didn't get a lot of economic data today. If you go in and look, you had new housing starts. Some of that economic data can be a little bit lumpy,

so it can be confusing if you don't follow it closely. If you look at the June data, it was actually down 8% month over month, which represented the biggest negative change over the last 12 months. But there's more to the story there. When you go look at the May data, May obviously becoming before June, it was a stellar month for housing starts.

So what do you see home builders doing? They're finishing existing projects and selling the inventory that they have. You also got mortgage data. From my perspective, mortgage data is going to be a little bit skewed as we're coming out of the COVID experiment, where we've seen interest rates come very high. Like David's written about a lot in the D.C. today is how many people out there have a mortgage of 4% or below. So when 30-year mortgage rates sit at 6% and 7%, there's just going to be less activity. The problem is, a lot of these things are measured week over week or year over year. So with the mortgage

data that came out today, you can say, yes, it was up 1.1% week over week, partly because mortgages did come down week over week. But that story has not been completely written yet. As we see inflation come down, as we see the Fed pivot on what they're doing with interest rates, the belief or the assumption would be fair that mortgage rates would come down and that would drive activity. What you're seeing in the entire housing market is just not a lot of transactions and not a lot of activity. Again, that story is still being written. I will encourage you to go to The Written, where you'll hear David talk about the hot topic of the day, which is artificial intelligence. The client was asking, or the reader was asking, what does this mean to an investor?

And how does an investor understand what artificial intelligence actually is? And when it's impactful to a business, something that would drive profits and create something that's investable. What this reminds me of, if you work in the industry, you can go through the calendar year by year and pick out the hot words of what was driving people's interest. I'm going to take us in a time machine back to the late 90s. And if we were able to get in that time machine and we started to talk to people about the internet, what I would guess is that at that time, let's call it 1999, I would guess that people were underestimating, again,

I'm going to say it again, that people were underestimating how much the internet would change the world, but they were overestimating the value of an internet company. So how does that apply today? There's a chance that we are underestimating the impact that artificial intelligence will have. But I'll tell you right now, I'm sure there's a lot of investors that are overestimating the business impact. And that's where we'd encourage you to be careful and to be wise on how you make investment decisions. It's human nature. Sometimes you get more excited about the sizzle than the substance. And that's where we would caution our clients to make good investing decisions. And that's why you come here to the DC today.

Tomorrow, you'll have all sorts of different economic data. You'll have the jobless claims, some manufacturing data, and a few other things. But most importantly, tomorrow, you'll have David Bonson back. And that's why you come here to the DC today. So thank you for letting me fill in. And until next time, friends. 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.

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