The Dividend Cafe - The Dividend Cafe Thursday - August 29 2024

Episode Date: August 29, 2024

Market Update and Economic Insights - August 29 In this episode of Dividend Cafe, an update on the market performance for Thursday, August 29th is provided. Key points discussed include the Dow's gain of 243 points, the NASDAQ's loss of over one percent, and stability in bond yields. The script highlights the decline in initial jobless claims, a revised upward GDP for Q2 driven by consumer spending, and corporate profits at an all-time high. The episode emphasizes the importance of vigilance in portfolio management despite market complacency and previews upcoming inflation data. Closing remarks include well wishes for Labor Day weekend and success in fantasy football drafts. 00:00 Introduction and Market Update 00:52 Economic Indicators and Employment 01:16 GDP and Consumer Spending Insights 01:56 Corporate Profits and Market Valuations 02:23 Risk Management and Vigilance 02:55 Upcoming Data and Weekend Wishes Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividend Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Welcome to Dividend Cafe this Thursday, August the 29th. And what was an update here on the Dow, we actually gave back about half of what we were up this morning. We were up almost 500 points mid-morning time and then gave about half that up. We ended up closing up about 243 on the Dow. The NASDAQ, by the way, was up over a percent during that period of time and lost all of that into the red. We closed at a negative 0.23% on the NASDAQ. So a big dispersion between basically growth and value technology sold off quite a bit today, physically just from intraday from the morning. The 10-year yield was up a few

basis points. We closed at 386, so pretty quiet in bong land. The spread on twos and tens is still just flirting with the zero number and being uninverted or less inverted. We're at three basis points on twos tens. So pretty much flat across the curve. Economic front today, we had initial jobless claims at 231 versus 232. So basically fully just in line on the employment picture, which was good. This is down in this sort of 230 level from 260s where we saw last summer. So there was a concern at that point that labor was falling out of bed faster than it actually has been. So we're holding up just fine on the employment front.

And then on GDP, we got a second revision for the second quarter. So Q2 was revised up from 2.8 to 3%. So some stronger GDP numbers and good number on employment as well. So generally a decent day in markets. The fuel, by the way, on GDP revision was all consumer-based. It was basically consumer spending. And it just goes to show when you have rising real wages, the consumers will spend them, meaning real, meaning that people's wages are going up more than inflation. So with inflation coming down, wages are going up on a net basis a little more. And so there's a net benefit on consumer spending. We also have positive corporate profits. Corporate

profits, they're at all-time highs. We're at 3.4 trillion in the NIPA number for the quarter alone. That's the national income and product account, basically, that measures corporate profits. All-time highs there, employment fine, GDP revised up. Those are all good things. And what I wrote in there is not that things aren't generally fine as they are now. Markets are pricing that in. And so valuations are just expecting these things. You have a 21, 22 times S&P. And so my concern or what we're working on at TBG is where those risks lie and to be vigilant about them.

I think there's a lot of complacency baked into this market. And so we're just being extra vigilant on what we're doing and what we're positioning and how we're building portfolios at this point, because it's these periods of time when you have volatility that collapses where you get most that start to relax their risk controls. And like I said not on our watch. So that's what's on my mind for today. Tomorrow we'll have an inflation number with PCE data which will be heavily watched so that can change things for the week but other than that

I wish everyone a lovely Labor Day weekend with your friends and your families. I hope you have a time for barbecue and good luck on all your fantasy football drafts. I've got three. With that, I shall let you go for the evening. Enjoy your Thursday and into your Friday and Labor Day weekend. I shall talk to you soon. Thank you. 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 Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered

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