The Dividend Cafe - The Dividend Cafe Tuesday - October 22, 2024

Episode Date: October 22, 2024

Market Insights and Economic Outlook - October 22nd Edition In this episode of Dividend Cafe, Brian Szytel provides an analysis of the day's market performance, noting minimal changes in major indices with the Dow down by six points, S&P slightly negative, and Nasdaq slightly positive. He discusses the rise in 10-year Treasury yields and attributes stock market movements to fundamental factors including positive earnings and economic growth, rather than political speculation. Szytel also addresses elevated volatility and political uncertainty, emphasizing the importance of focusing on fundamentals. Additional updates include comments from San Francisco Fed President Daley on interest rates and upcoming economic data releases. 00:00 Introduction and Market Overview 00:19 Interest Rates and Bond Market Insights 00:38 Political Influence on Markets 02:27 Focus on Fundamentals 02:36 Economic News and Upcoming Data 03:26 Conclusion and Final Thoughts 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, October the 22nd. And Brian Seitel with you here today on a very flat day in markets. on a very flat day in markets. We dropped six points on the Dow, S&P, and NASDAQ. S&P was slightly negative, NASDAQ slightly positive by about 0.1%. So there you have it. The 10-year was up a basis point on the day. We closed at 421. So interest rates have tended to move higher here. We were down in the 355 area on 10s, and now we're up towards 420. So it's risen 55 basis points at this point in about a little over a month or so. I think actually the bond market move is proof of some of the reasons behind the overall stock market move, which is that

it's more growth and fundamental based than any sort of political guesswork on who might win the White House. I know there's been some media talk about that because I was asked last night late on CNBC about what I thought about Trump victory being priced into markets, if that's what was moving, things like this. So short answer is no, I don't, because I think it's unpredictable. And then also, I just think you've had positive backdrop. You've had earnings that have been better than expected. You've got earnings growth in the next year that's expected to be pretty good, 15% call it. You have a Fed easing now. You have had some China stimulus come out. And you've had the labor market impress. And all of these things together are why markets have traded a little bit higher here. That said, I think the reason the volatility index, the VIX, is also elevated, because usually you get strong markets, you get volatility that can sometimes move lower because people are feeling better. But that's not the case here. And I think that is more attributable to political uncertainty than some of the moves

in the asset classes. And suffice it to say, regardless of all of that, I know there's a tendency to want to try to position around outcomes of different things, like the election and what policies may come to pass or not. But we don't even know which way Congress is going to go either. And so let alone which policies may or may not be spoken about from a political motive or negotiation tactic versus what may actually get through Congress versus how markets will actually receive those things. So those are a lot of variables there. And I really just don't think short-term people need to really try to function around positioning in lieu of all those things because you're just going to get it wrong.

We like to focus on fundamentals. That's what's driving our decisions day in and day out. And that is what we will continue to do. So there you have it. On the day, from an economic standpoint, there really wasn't a lot of news. San Francisco Fed President Daley said that there isn't anything new that has changed their rate cutting plans and that interest rates are still restrictive where they are now. And so they're still on their path. plans and that interest rates are still restrictive where they are now. And so they're still on their path. Again, there's now still a 25 basis point rate cut priced in for both November and for December. And that's already in markets as we speak here. Again, if you're interested in the clip from last night, it was 9.30 Eastern. So take it for what it is, okay? It's late in the day

after a 14, 15 hour day. But feel free to give that a watch on CNBC Street Signs tomorrow. We'll have some existing home sale data out, and then we'll have some data from the Fed Beige Book that they released that maybe gives some insight into some of the economic thoughts that they have around interest rates. With that, I shall let you go. I appreciate you listening. Reach out with those questions. Thanks so much. 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

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