The Dividend Cafe - The Dividend Cafe Tuesday - July 9, 2024

Episode Date: July 9, 2024

Dividend Cafe: Market Commentary and Economic Updates, July 9th In this week's Dividend Cafe, Brian Szytel provides a market commentary from New York. The Dow closed down 52 points, while the NASDAQ and S&P 500 remained slightly positive. A significant topic discussed was Federal Reserve Chair Jay Powell's comments to the Senate finance committee about the potential economic risks if interest rates are not cut soon. The likelihood of a September rate cut has increased to 70%. Brian highlights concerns about the economic data, slowing growth, and its impact on earnings per share for the S&P 500. Upcoming economic indicators and more Fed comments are anticipated this week. The Bonson Group emphasizes the importance of due diligence and consulting with professional advisors. 00:00 Introduction to Dividend Cafe 00:23 Market Overview and Economic Data 00:41 Federal Reserve Insights 01:30 Economic Predictions and Market Expectations 02:29 Upcoming Economic Events 02:51 Closing Remarks 03:01 Disclaimer and Legal Information 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's Tuesday, July the 9th, and Brian Seitel with you here today from our New York City Manhattan office studio. our New York City Manhattan office studio. In what was generally a fairly flat day in markets, the Dow closed down about 52 points, but the NASDAQ and the S&P were just both slightly positive on the day. So fairly flat. The 10-year was up a little less than two basis points. We closed at 429 on 10s. There was larger economic data, I guess, out in the news today was Jay Powell's comments to the Senate Finance Committee. He does this twice a year regarding a risk of the economy slowing down if they wait too long to cut interest rates, basically. So there's a change in narrative around citing more confidence needed on inflation before they can cut rates to now the weakening in

the labor market and some of the economic data is also a risk to this equation. And we need to try to get this thing right. There's now a 70% chance for a September rate cut. So this is up from call it 30, 40% a couple of months ago. So it's moved up quite a bit. And I suspect that it will continue into September. I mean, of course, economic data can always change. So it's all subject to that. There's been sort of a pretty consistent feeling inside of some of this economic data with a little weaker numbers. So that's what they're dealing with. Comment that I added in there on what's on Brian's mind, which is really, you know, if economic data is going to slow, and it is, if the Fed's citing that, and so they're

going to start cutting interest rates, it's fairly hard to have a slower economy and less GDP and a little bit higher unemployment, and then also get an expansion in earnings per share in the S&P 500. So what's priced in right now is about a 10.1% earnings per share growth. That's about a 4% roughly top line growth, the rest of it coming from margin expansion. So it's fairly lofty, really. I mean, those are pretty optimistic numbers to expect in the second half. Again, if we're going to have this backdrop of slightly cooler economic data on top of that, it wouldn't surprise me if you saw some of those expectations revised lower. And then in that type of environment, things that are already priced in the market for

basic perfection, I mean, they're trading at very high valuations because there's a lot of positive things already priced into the share price, I believe will struggle in that environment. So something to keep in mind. Tomorrow, we'll have some more Powell comments. We've got some other Fed speakers. So there's some more Fed speak that we'll get out. There's also some wholesale inventory data that we can chew through in Dividend Cafe for you in the economic calendar. The real news, I guess, for the week is really going to be around Thursday's economic calendar, which includes CPI numbers, both today and tomorrow. We're a little lighter on the economic front. But with that, I shall let you go to get to your evening here. And please do reach

out with any questions as always. I appreciate them and enjoy answering them. Take care and have a nice evening. 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 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 investment advice.

The Bonser Group and Hightower shall not in any way be liable for claims and make no express 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 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.