The Dividend Cafe - The Dividend Cafe Tuesday - July 16, 2024

Starting point is 00:00:00 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 Tuesday, July the 16th, and this is Brian Seitel with you here today on a very positive day in markets, pretty much across the board, although there was at least some disparity on the different indexes. But you had a significant rally in stocks. That's coming off of yesterday's move higher as well. And you had a rally in the bond market as well. And 10-year yield dropped on the day. And we're into the high teens, 4.19, 4.18 range on 10s. Rally across the board in stocks and bonds. Notable in today's move wasn't

Starting point is 00:00:45 just that the Dow was higher like that. It was that the other indices like the S&P and the NASDAQ, particularly that are much more technology driven, were so far different. And frankly, NASDAQ was slightly lower. Part of this is that rotation that continues to happen to a broadening in the market. You're seeing some better participation with parts like small cap names now up five days in a row, which is over a 10% move. They had been big laggards and interest rate expectations are coming lower. There's now 65 basis points of rate cuts priced in, so a pretty significant move in those expectations. And you're seeing that rotation from growth to value just keep unfolding

Starting point is 00:01:25 almost day by day. Sectors that were up were things like financials today, REITs, travel, more cyclical value-oriented names like that. On the economic calendar, you had retail sales beat expectations in June, and also May was revised higher. We got basically an unchanged number, a flat number, a zero, but we were expecting a negative four-tenths. So a decent beat in retail sales and continued strength in the consumer. That's technically the highest in three months. The weakness, by the way, inside of that, even though it beat, it would have beat by

Starting point is 00:02:00 much more, but there was a cyber attack in the auto industry. And so that was actually shaved off about four-tenths. So we would have been more higher even than we printed otherwise. There was also some import prices that were lower, or I'm sorry, flat on the month of June. So we got a 0% number on import prices. We were actually expecting a 0.2% decline, but there was a drop in import fuel prices that caused that difference there. So on STPG, there was a question actually, David took it and answered it nicely regarding what we define as small caps and where did they fit in the portfolio, if they can be in the dividend portfolio or what. And yeah, the answer is we've had smaller capitalization names in the dividend

Starting point is 00:02:41 portfolio if they fit the criteria before, but it's less common. And frankly, I feel the ball keeps moving down the field as far as what we call small caps. They're actually not that small these days. But aside from that, we have a growth portfolio that we tend to have more of our non-dividend oriented small cap names inside of, again, high conviction, still bottom up type of the way that we look at that with those positions, but just different than the dividend portfolio. So tomorrow we've got housing starts, we've got building permits, we've got industrial production, and then we have the Fed's beige book. So there's a decent amount in the economic calendar

Starting point is 00:03:21 to go through. And I know that was a mouthful for the day. So I'm going to try to end it here to give you your quick recap. And then I'll be back with you tomorrow, which will be Wednesday, on some more of that economic news that comes out. In the meantime, reach out with questions, as always. We appreciate them. Take care. Have a good night. The Bonson Group is a group of investment professionals registered with Hightower Securities

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The Dividend Cafe - The Dividend Cafe Tuesday - July 16, 2024

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