The Dividend Cafe - The Dividend Cafe Thursday - May 30, 2024

Episode Date: May 30, 2024

Market Recap and Economic Indicators for May 8th, 2023 In this episode of the Dividend Cafe, we delve into the recent market events with a focus on the downward trend experienced across major indices such as the Dow, NASDAQ, and S&P. The Dow took a significant hit, largely due to an earnings disappointment from a major software company. The discussion includes updated GDP figures for Q1, showing a decline to 1.3%, and initial jobless claims which remain strong at 219,000. We also address the notable drop in pending home sales, attributed to continuing high mortgage rates. Additionally, there's a segment about the presence of international stock positions in the dividend portfolio and the relevance of foreign tax withholding. As always, the episode concludes with an invitation for listeners to reach out with their questions. 00:00 Introduction to Dividend Cafe 00:18 Market Recap: A Down Day 01:00 Economic Indicators Update 01:43 Housing Market Insights 02:24 International Stock Positions 03:12 Conclusion and Sign-Off 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 May 30th on Thursday. Thank you for being with us here again. And unfortunately, what was another down day after yesterday's sell-off. We followed through again today. The Dow closed lower by 330 points on the day. Both the NASDAQ and the S&P were lower as well. And the 10-year yield dropped to six basis points. We closed at 455 on 10s there. So a bit of a sell-off day today. The volatility index was up slightly in this as well. The Dow was down a little bit more than some of the other indices, particularly the S&P, just because it's a price-weighted index. And one of the names, which is the largest client relationship software company, dropped 20% on some disappointment in

earnings. And so that moved the index a little bit more than some of the others. But overall, pretty consistently down day. Inside of that movement, we had a revision on Q1 GDP. We were at 1.6% in the flash read before on GDP. And today we revised that lower to 1.3. So some weaker GDP number for Q1. The previous quarter, which was in Q4 last year, was in the low threes. Quite a bit stepped down on GDP, although it's expected to pick back up in the second quarter. But there was some weakness

there today. We had some initial jobless claim numbers that were right in line with expectations and still very healthy. We're at 219,000 on initial jobless claims. So continued strength in the employment picture. And then there was a disappointment in pending home sales. So this is a forward-looking indicator on real estate transaction activity, and it was down 7.7% on the month. We were only expecting about a 0.4% decline. So it's a pretty big disappointment. And when you look at interest rates or mortgage rates, that is, in the high sixes or low

sevens, I don't know that it's much of a shocker that new contracts being signed and pending sales would be volatile around that. So that's just where we are with housing continues to just be stuck with very little activity. But that number on pending home sales is technically the lowest since April of 2020. So it's these higher interest rates are biting at least in the housing front. There was a Ask TPG section in there today about international stock positions inside of the dividend portfolio. They aren't excluded. We've owned a few here and there in years past.

We typically find better value inside of the domestic markets for what we're after when we do our bottom-up research and analysis. But that doesn't mean that there can't be an occasional holding that makes the cut in developed Europe or developed Asia. The second part to the question was around foreign tax withholding and if that's a big tax drag in that consideration. And it isn't just because there's foreign tax withholding and then there's a foreign tax credit for U.S. filers. So that's not really a big deciding factor, at least at TPG, but something to talk over nonetheless. So there you have it for the day.

We'll be back with you tomorrow with Dividend Cafe. Of course, as always, it'll be Friday. And I wish you all a lovely evening. Reach out with questions, as always. Thank you. lovely evening. Reach out with questions as always. 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 Securities LLC. Advisory services are offered through Hightower

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