The Dividend Cafe - The Dividend Cafe Thursday - May 2, 2024

Episode Date: May 2, 2024

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, May the 2nd, and we finally got some green on the sheets today. There was an up day in the markets. We were up 322 points on the Dow and the NASDAQ was actually up over a percent and a half. So big day for the NASDAQ. The 10-year closed at 459, which was down four basis points on the day. So we had a little come out of interest rates and some up markets following the conclusion of the Fed meeting yesterday and some not necessarily dovish comments, but less hawkish than what was feared. And so markets felt better today. Earnings continue to come out too. And I think there's a positive backdrop with that as well.

I looked at previous rate tightening cycles when they stop, basically, when the Fed is on hold, when they're holding rates steady after they've already tightened and before they start cutting, just to see where markets typically trade in those environments. And there was, most of them were positive. There was 10 periods out of them. I'd say six of them were positive. And the ones that were negative were really not very negative. The ones that were positive were much more heavily skewed towards the, you know towards a significant amount of upside. So the longest period was a little over 14 months in 06 and 07, that period of time when they rose rates, actually to a similar degree that we are now, and kept rates there for about 14 months. We were up about 20%. This particular period of time,

20%. This particular period of time, it has been a little less than 300 days or so, and we're up about 12%. So the point is just that historically, we're sort of in line with what typically does happen before they start cutting rates. And in this environment, it's just going to depend on why they're cutting rates. Can the economy and the employment picture sort of hang in there while the rate policy is restrictive here? There was a question that I answered about international investing, particular to dividend growth. And yeah, there's opportunity there. I mean, particularly, you know, with what we're doing more in the large cap domestic space. I mean, we do find opportunities developed Europe and Asia occasionally, but when we put things side by side, we typically just favor the fundamentals more

here at home in that regard. Now, that doesn't mean that we don't find opportunity in international investing on the equity side because of course there are, and particularly in the emerging markets. And we're focused on a growth strategy there, and then a dividend strategy there as well, where there's just a better backdrop of growth in those economies and some better valuations that way you can find domestically. So there's my answer for that question. But jobless claims for the day came out at 208,000. We've seen this sort of low 200s number now for just many, many months, six months, a year almost. And I just wanted to put it in perspective that these numbers are the same as they were in 1960 when the population of this country was literally half of what it is today. it is today. So to give you an idea of how healthy this job market is in the employment picture, the amount of people filing for unemployment is the same amount of people as 60 years ago.

So it's pretty resilient, pretty strong. The trade deficit came in at 69.4 billion, which was about the same as last month. And we're about floating around these sort of year highs. And it shaved off probably by estimation as around nine-tenths of a percent from Q1 GDP. We came out at 1.6 versus two that was expected. And part of that is this sort of trade deficit. So buying widgets from overseas will do it. With that, I'm going to let you go for the evening. Thanks for listening. Please reach out with your questions. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and 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. Thank you. not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute investment advice. The Bonser Group and Hightower shall not in any way be liable for claims and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice. This document was created for informational

purposes only. The opinions expressed are solely those of the Bonson Group and do not represent those of Hightower Advisors LLC or any of its affiliates. Hightower Advisors do not provide Thank you.