The Dividend Cafe - The Dividend Cafe Thursday - July 18, 2024

Episode Date: July 18, 2024

Market Volatility Analysis and Economic Updates - July 18 In this episode of Dividend Cafe, Brian Szytel discusses the continued market volatility as the Dow drops 533 points, closing almost at its daily low. The S&P and NASDAQ also decline by about 0.7 to 0.8 percent, while the 10-year yield increases by four basis points to 420. Despite the market's turbulence, political developments such as increased tariffs on China and their impact on technology, especially semiconductors, are highlighted. Brian reflects on the significant shifts in trade dynamics over the past decade, noting a reduced reliance between the U.S. and China. Additionally, the episode covers initial jobless claims and a significant positive surprise in the Philly Fed Manufacturing Index. With a quiet economic calendar ahead, the episode concludes with a preview of the upcoming longer-form Dividend Cafe newsletter. 00:00 Introduction and Market Overview 00:46 Impact of Tariffs on China and Global Trade 01:47 Economic Indicators and Job Market Update 02:21 Upcoming Events 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. It is Thursday, July the 18th. Brian Saitel with you here today in what was a continued volatile session. The Dow closed actually almost at the lows for the day. We closed it down 533 points, which was almost 1.3% on the day for the Dow. The S&P and the NASDAQ were both down about 0.7% to 0.8% each respectively. The 10-year yield was up four basis points and closed at 420. So again, volatility, the VIX today was up 10% on the day with just continued up and down here in markets last three or four days with some divergence,

some rotation, things like this that we've spoken about, but just some shifting market realities with some political dynamics and so on. I wrote in there about some talk of increase in tariffs on China. It's been in the news a lot. It's caused volatility in the technology space, particularly in the semiconductors. And the point to my comment was really just to talk about not just what may come, but what has already happened, which is the policies from the last two administrations, one Trump and one Biden, have already set in place some of these things that has caused a pretty dramatic shift in the world order of where things are made in the world, in the emerging world.

The U.S. now imports more from Mexico, for example, than it does from China. And so the two countries are just a little less reliant on one another. And it isn't to say that increasing tariffs won't have a meaningful effect in growth in China. It really will. It's just that there's some diminishing return on these things as these policies have just now been in place for a decade. At this point, from China to the developed world, total exports are now only about a third of what they send out. And so two thirds meaning go to other places. So just something to keep in mind as we move forward. In the economic calendar, we had initial jobless claims at 243. We were expecting 229.

Bit of a cooling going on in employment, but in the grand scheme of things, still fairly healthy in that front. The Philly Fed Manufacturing Index beat meaningfully. We were expecting 2.9 and we got 13.9. So those numbers are arbitrary to most, frankly, including myself. But if you just look at the disparity between what was expected and what we got, significantly good sign for manufacturing and for GDP, at least in the region. Tomorrow, we've got a fairly quiet economic calendar.

There's a few Fed speakers out and some other things to chew through. We'll have the longer form dividend cafe in your inboxes, as we always do on Friday. And with that, I'll let you go for the evening. I wish you well and reach out with questions as you always do. Thank you very much. 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 Securities LLC. Advisory 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

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