The Dividend Cafe - The Dividend Cafe Tuesday - May 7, 2024

Episode Date: May 7, 2024

A daily summary of key market data and economic nuggets.  Reach out with questions anytime! 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. This is Tuesday, May the 7th. In what was really quite a quiet day of trading today in markets, we were up over 100 points or so this morning and drifted a little sideways, a bit lower, and ended up closing just up 30 points on the day. Volatility continues to move lower here. The VIX is in the low 13. So just kind of a quiet day, although it technically does mark the longest winning streak, at least on the Dow, since December. Take it for what that's worth. The NASDAQ today was a little bit lower. The S&P closed just a little bit higher,

so kind of a quiet day in markets. On the year, I guess, the Dow is now up about 3.5% on the year. The S&P and the NASDAQ are both up about 9% on the year. Sector-wise, again, this is for the year. Leading sector for the year is energy, which is up a little over 11% on the year. Both industrials, financials, and utilities are actually all up over 9%. Real estate is the most notable negative sector for year-to-date 2024. In a quiet day of trading and frankly, a quiet day in the economic calendar, I wanted to just go over some of those year-to-date numbers with you. There was a treasury auction today that was sizable. It was $58 billion in three-year notes. Bid-to-cover ratios were quite healthy, and that's a good sign as the treasury needs to produce more and more treasuries to finance

deficits. We've got another $40 billion out tomorrow in 10-year treasuries, and then another $22 billion out in 30s. There was a few questions that we added in there today, one that David answered on the payrolls number as far as what is essentially good news or the other way is bad news, actually good news now. So higher unemployment rate or more people filing for unemployment, why was that looked at as good with markets higher was the question. And yeah, I mean, in a very Fed-centric economy at this point for what it has become, there are market participants looking at negative news as more fodder for the Fed to be able to lower interest rates sooner than later. And so there

are some that looked at that as a positive thing. I still tend to believe good news is good news and bad news is bad news. So we definitely want people employed. And I don't subscribe, as David doesn't in the comment either, to something like the Phillips curve, which says that there has to be a higher unemployment rate leads to lower inflation, and a lower unemployment rate leads to higher inflation. That has historically definitely not been the case for many, many decades. So those are some thoughts as far as the payrolls number that we got yesterday. There was another question on residential real estate trusts and do we look at them? Answer is yes, we do. I mean, we look at all sectors in the real estate market for value. And technically now we are finding more value

in our retail name and in our advertising name in the REIT space than we are with residential, both from a current yield perspective, from a performance perspective, but then also just from a relative value side of things too. You do get a little added volatility outside of residential, which tends to be a little less cyclical, but the risk reward is more handsome in our view at this point than otherwise. And so that's where we're playing. The other thing is we already have individual names with plenty of residential exposure and a lot of our asset managers.

So there's already space in the portfolio there. So listen, with that, I'll let you go on this quiet trading day. I wish you all a good evening and reach out with your questions, please. We're always here to answer them. 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 Advisors LLC. This is not an offer to buy or sell securities. No investment process is free of risk. There's 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. Thank you. 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.