The Dividend Cafe - The Dividend Cafe Thursday - July 11, 2024

Episode Date: July 11, 2024

Dividend Cafe: Market Commentary and Economic Updates - July 11th In this episode of Dividend Cafe, Brian Szytel provides an insightful overview of the market activities on Thursday, July 11th. Key highlights include a mixed market performance with the Dow closing up by 32 points, while technology-heavy indices like the S&P and NASDAQ experienced declines. The CPI data released showed cooler than expected inflation, indicating positive trends for the economy and aligned with the Federal Reserve's goals. Bond yields have also rallied, reflecting these changes. Additionally, initial jobless claims were slightly better than anticipated. Szytel explains the day's performance, attributing the technology sell-off to a 'buy the rumor, sell the news' reaction. He also provides a brief outlook for the upcoming PPI index release. The episode concludes with a reminder about the weekly Dividend Cafe longer format soon to be available. 00:16 Market Overview: Mixed Day in the Markets 00:42 Inflation and CPI Data Analysis 01:43 Interest Rates and Bond Market Movements 02:36 Technology Sector Sell-Off 02:51 Upcoming Economic Reports and Conclusion 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 is Thursday, July the 11th. Brian Seitel with you here from our New York office. On somewhat of a mixed day, really, in the markets, the Dow actually held in almost the same for the most of the day. It actually closed up about 32 points, but it kind of hovered around that value. Both the S&P and the NASDAQ were down. The S&P, again, these are more technology-heavy indices. The S&P was down had CPI data on inflation out today that was much cooler than expected. Headline dropped one-tenth of a percent for the month of June. We were expecting an increase of a tenth, so that's a two-tenth beat. So 0.1% increase. We were expecting a 0.2% increase. So basically year over year, CPI is now 3% flat. We were expecting 3.1. So these are good numbers. Inside of those numbers, it was shelter that had the lowest increase since August of 21, just as we've spoken about a dozen times that the owner's equivalent rent and the shelter cost that's baked inside of inflation

has been too high and it's now coming down. And so these overall numbers are coming down again. These are positive signs. It's what the Federal Reserve wants to see. It basically puts their PCE measure, if you calculate it, it's somewhere near 2.6%. So we're moving in the right direction in a pretty rapid way. And they've telegraphed that. The yield curve rallied today across the curve. Bonds rallied. Two-year rate dropped to four and a half. That's the lowest rate we've had since March. Ten-year was down seven basis points at 420. So interest rates in the U.S. are now moving a little lower because inflation is now moving lower. Inflation

expectations are moving lower and central bank policy assumed rates are also moving lower. And again, I wrote this yesterday just about the kind of the weirdness really in Japan. But again, perfect example today, you saw the yen rally pretty big against the dollar. So that trade is going the opposite way now that has been the case for quite some time. We also had initial jobless claims on the day that were a little better than expected. We got 222 versus 232. So employment's still hanging in there. I call today basically the porges just right from an economic report on the day, which is cooler inflation, employment hanging in there. Those things are good. The technology sell-off, all I can really attribute it to, or mostly I think, is sort of buy the rumor, sell the news. Technology has been moving higher because of an anticipation

of lower rates and cooler inflation. And now that you've gotten it, you had this sort of big pullback on the day. So there you go. Tomorrow, we have a PPI index number, which is the producer price index number out. And you'll have the longer form dividend cafe in your inbox right before your weekend. So I appreciate you listening. Reach out with questions, please, and have a lovely weekend if I don't speak to you. Thank you. services are offered through Hightower Advisors LLC. This is not an offer to buy or sell securities. No investment process is free of risk. There is no guarantee that the investment process or investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced

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