The Dividend Cafe - The Dividend Cafe Tuesday - July 30, 2024

Episode Date: July 30, 2024

Market Rotation and Economic Updates - July 30, 2019 In this episode of Dividend Cafe, host Brian Szytel analyzes the mixed market performance on July 30, 2019, highlighting the Dow's rise by 203 points, while the S&P 500 and NASDAQ saw declines. Seitel discusses market rotation, noting the narrowing performance gap between different market segments and comparing the current situation to the year 2000. He also provides updates on economic indicators, such as consumer confidence and job openings, and anticipates the outcomes of upcoming ADP payroll numbers and the FOMC meeting, where expectations for a September rate cut are high. 00:00 Introduction and Market Overview 00:21 Market Rotation and Performance Analysis 01:59 Economic Indicators and Consumer Confidence 02:49 Upcoming Economic Events and Expectations 03:21 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 Tuesday, July the 30th, and Brian Seitel with you here today from our Newport Beach office. And on a bit of a mixed day actually in markets, the Dow actually closed more or less at the highs, pretty close to it on the day. Dow closed up 203 points. The S&P was down half a percent, and the NASDAQ was down almost 1.3% on the day. So again, that delta between different parts of the market and the broadening out of what's performing this year, it continues to

shrink as some of that rotation continues underway. Today was another 100 basis point difference between an equal weight and a cap weighted index. As an example, we've written about this and I have before, but we've compared some of the similarities between now and the top heaviness and markets and where valuations are. And frankly, technology being the weight that it is of about a third, a little less now as it comes down in the S&P 500, similar to the year 2000. And this was maybe three weeks ago, I wrote about just the shockingly low number of average stocks that make up the other 493 names inside of the S&P 500. There was only about 20% of them that year to date were actually outperforming the index itself, because again, of where that performance attribution was

coming from right on the top level. And since then, over the past basically 2021 days, the last three weeks, it's gone now to 70%. So the rotation has been ongoing for several weeks. It's been pretty real. And I know we've written about it already. But that delta, I think is pretty substantial in coincident, I'm sorry, not coincidentally, the last time that you had a 70% sort of average stock in the S&P 500 outperforming the index itself was right after 2000 and 2001. As that rotation got underway. History doesn't always repeat exactly,

but as they say, it often rhymes. And so that's what we're seeing more of now. In the economic calendar, it was quiet today. There was a couple of small pieces of data. We had a consumer confidence number largely in line. Again, we look at that as more of a lagging indicator. So there's not a ton to read in there. Consumers are feeling okay. Things they're noting are things like labor and inflation and interest rates, sort of the same usual suspects. But all in all, it was a fairly good number and in line with what was expected. The job openings number for the month of June, what we call jolts, was also about in line with what was expected. It was actually a little higher, a little bit better. But since the trend is still lower year over year, which is moving in the right direction to stabilize employment and labor, I would chalk this month up to just more of that same. The year

over year number is trending lower on new job openings, which is normalization. Really the news for the week, I think a lot of it will be both tomorrow. We've got some ADP payroll numbers, but more importantly, we've got an FOMC meeting that will conclude on Wednesday, which is tomorrow, with Jay Powell giving a press conference after. And so we have, obviously, very high expectations for a September rate cut, but I'll be curious to see what he says, particularly in the questions that follow with the color that he provides. I suspect he'll all but assure that September is our launching point for a declining rate cycle. So quiet day there, mixed. I'm going to let you go for the day with that. And I'll be

back with you tomorrow on Dividend Cafe. Please do reach out with your questions. I always love getting them. And with that, have a nice evening. Thank you. 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. There is no guarantee that the investment process 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. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute. Thank you. 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 tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information.

Tax laws vary based on the client's individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for any related questions.