The Dividend Cafe - The Dividend Cafe Thursday - May 16, 2024

Episode Date: May 16, 2024

Market Update and Economic Indicators: A Snapshot In this episode of Dividend Cafe, recorded on Thursday, May 16th, the host provides a summary of the day's market activity, noting a flat day in the markets with a brief touch on 40,000 points on the Dow. Despite a mild decline by the close, bond yields rose slightly, and recent economic indicators including the CPI data, Philly fed and empire state manufacturing indexes, and industrial production, suggest a steady, if not expanding, economy. Brian also points out the positive jobless claims data and the rebound in new home constructions as signs of economic health. Additionally, an increase in real personal income and a 35% rise in the S&P 500 since the pre-pandemic period are highlighted as indicators that do not point towards an immediate recession. The episode concludes with a look forward to the next Dividend Cafe installment and wishes for a good weekend. 00:02 Market Overview: A Flat Yet Positive Day 00:38 Manufacturing and Economic Indicators: Holding Steady 01:05 Employment and Income: Signs of Economic Health 02:25 Housing Market and Inflation: A Positive Outlook 03:05 Closing Thoughts and Look Ahead 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. Hello and welcome to Dividend Cafe. It is Thursday, May the 16th, and a flat day actually in markets at the close, although we were up most of the day in the trading day. And actually, earlier this morning, we actually breached 40,000 on the Dow. And for someone that remembers when it was just 10,000, I suppose that dates me a bit. It's nice to see that for the first time. We actually closed just below. The Dow was down 38 points on the day. Bond yields were up just slightly, up two basis points on 10s. We closed at 438. It's a bit quiet to close into the day, but following better than expected CPI data yesterday, I think the market is generally still trading quite positive.

Philly Fed manufacturing today was a little weaker, as was the Empire State Manufacturing Index. But basically still in line. Manufacturing is holding in there, right? Just in expansion territory on that number. Industrial production today was flat. So across the board, these whatever four different metrics in manufacturing are not necessarily showing a continued big expansion, but also not declined, just flatlining in there, which isn't necessarily a negative thing. That combined with total number of employed in this country at 158 million versus 153 pre-pandemic. If you look at real personal

income, meaning above inflation, what has gone above inflation since the pre-pandemic era, even though inflation has averaged a higher amount, ex-transfer payments from governments were up a trillion. We're now at 16 trillion in real personal income. And then S&P 500 is up 35% since pre-pandemic. So if you look at those three different things, manufacturing hanging in there, more employed than we had before, more real personal income than we had before by a trillion in the stock market at 35%, none of those things are pointing to a recession, at least not now. So whether we get an ultimate soft landing or hard landing, when the Fed starts to cut rates, I'm just pointing out that what we're looking at today, and also with earnings,

is not necessarily recessionary at all. So those are good things. The other data points for the day, we had jobless claims that were right in line. We're at 222. Just to put that in perspective on how healthy that is, as far as how many people are filing for unemployment. That's the same number basically we had in 1960. If you think about the population growth being up 40% since then, it's pretty surreal really to see employment doing so well. Those things are all good. We also had a positive data point on the day with new homes rebounding for the month.

We're now at 101.36 million new homes being started. Part of that is just rates coming down a little bit here recently. If you think about inflation moving lower, which it is, and interest rates that have now started to move lower, which technically they are, that's not necessarily a bad recipe for new home construction because input prices are part of what home builders have to pay to build a house and interest rates on mortgages are what borrowers that buy a house have to pay. And so those two things are moving in the right direction. But all this to say, generally a positive day today in markets. Again, it's Thursday. We've got Friday. We'll have Dividend

Cafe, the longer form version for you as we always do. And with that, I'll let you go. I'll be back with you early next week. And if I don't speak to you, I hope I do. But if And with that, I'll let you go. I'll be back with you early next week. And if I don't speak to you, I hope I do. But if I don't, I wish you all a good weekend. Okay. Thanks so much for listening. Bye-bye. 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.

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