The Dividend Cafe - The Dividend Cafe Tuesday - July 23, 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 this Tuesday, July the 23rd. Brian Seitel with you here today from our beautifully new designed and newly opened West Palm Beach, Florida office. new designed and newly opened West Palm Beach, Florida office. And again, a big thank you to both Jolene and Mina for working tirelessly over the weekend and just making this new office so special and beautiful. I can't wait to show any of our Florida clients or any clients otherwise these beautiful new digs anytime you're out in this area. So on the day, a bit of a flat day in markets, the Dow closed lower by 57 points, which was roughly the low of the day. Both the S&P and the NASDAQ were also slightly lower, a tenth of a percent, a little less than that on the S&P. The 10-year was also flat. We closed at 425 on 10s. In markets, we have some PCE data that will be more important and then a Fed meeting next week. And I think markets are more waiting for that news and just continuing to get earnings data

Starting point is 00:01:10 that comes out here in Q2 earnings season. Speaking of which, it's been an interesting thing to see the financials be such a big winner as far as expectations go. Overall, we're still expecting this 11% growth for the year 24, which I have thought would have been revised a little lower. It hasn't. And then we're expecting a 14% move higher in earnings per share growth for 2025. And one of the reasons. We're now at a 17% growth rate. So that delta of what we thought was going to happen in earnings is the most changed in the financials. There's actually the highest number of sector reporting so far too, which is about 35% or so of those names now reporting for Q2. So part of the rotation that we've seen as far as growth to value, there's a lot of talks about politics and who's leading in the polls now between Trump and Kamala Harris and interest rates cuts that are coming up down the pike.

Starting point is 00:02:13 And those things are real too, but there's fundamentals that are at play here as well. And so I wanted to point that out. 84% of the sector is now above its 200-day moving average. That's right up there with some of the highest sectors on the year. We still have some flows into the sector. I guess if you look at retail flows that are yet to show up, but that's a pretty common lagging indicator and frankly may change here. On the day in the economic calendar, we had existing home sales come in much lower than expected. It's actually a 14-year low. So there's just not a lot of transactions happening in real estate. And you've had some inventory start to build. We're now at about a

Starting point is 00:02:50 4.1-month supply, which actually historically has been fairly low. But from where we've been the last couple of years is edging higher. Counterintuitively, you actually had prices for the month still up 4%. So it hasn't flowed through to prices, although with growing inventories and declining transactions, you sure think it ultimately would. But that's your conundrum for real estate that we are in currently. We had a Richmond Fed Manufacturing Index number out that was the lowest in four years. So take that for what it is, some mixed news in the manufacturing front there in the economic calendar tomorrow.

Starting point is 00:03:22 We've got some flash PMI data, some new home sales, and some trade data that we can chew through in Dividend Cafe. And I'll be back with you live here from Florida tomorrow. Reach out with questions, enjoy answering them, and take care. Bye-bye. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, with Hightower Advisors LLC, Thank you. or investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable.

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The Dividend Cafe - The Dividend Cafe Tuesday - July 23, 2024

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