The Dividend Cafe - The Dividend Cafe Tuesday - October 29, 2024

Episode Date: October 29, 2024

Market Update and Earnings Insights: October 29 Edition In this episode of Dividend Cafe, Brian Szytel presents an overview of the market conditions on October 29, 2023, reporting mixed results with the Dow down 154 points, the S&P slightly positive, and the NASDAQ up by 0.7%. Key topics include the impact of earnings reports from major companies, the movement in 10-year bond yields, and job openings data. Brian also addresses a viewer question on the merits of index ETFs versus actively managed funds in the municipal bond space, emphasizing the importance of active management. The episode concludes with a preview of upcoming economic data releases. 00:00 Introduction and Market Overview 00:47 Bond Yields and Job Market Insights 01:43 Upcoming Economic Events and Market Impact 02:06 Investment Strategies: Active vs. Passive Management 03:30 Conclusion and Upcoming Reports 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 29th, and Brian Seitel with you here in our West Palm Beach, Florida office. our West Palm Beach, Florida office. On generally a fairly positive day in markets, albeit mixed, the Dow actually closed down 154 points here. The S&P was slightly positive and the NASDAQ was up about 0.7%. We've got a lot of the magnificent seven names reporting earnings this week. And I think some of today's move was related to some of that momentum. The 10-year on the day, at least, was actually up five basis points at 432 for most of the trading day. And I almost wrote something about it. It actually ended up strangely pulling back right before the close and well after all the economic data had already been released. So we closed flat on the day on 10s. I know that sounds a little boring, but because bond yields have risen now

65 basis points just in a couple of weeks, it really has become an important topic in overall markets to pay attention to. Today, we had jolts numbers. This is job openings numbers. It's a little bit of a lagging report, meaning it doesn't come out all that real time, but it gives us some insight into the demand side of the employment market with how many jobs are available from employers. You're right now at about a one, almost an even one-to-one mix. It's about 1.1 openings as there are unemployed out there looking for jobs. So it's almost balanced. It's almost equal, still a little bit off and has come a long ways from the post-COVID paradigm coming out of that with everything that

transpired. More balanced labor market. Again, rates pretty calm on the day, mixed stocks. The market is just being pulled right now in different directions. You got election next week on Tuesday. You've got a Fed meeting ending on Thursday. We've got payroll numbers on Friday of this week. So there's just a lot of different things here being baked into the market. And then on top of that, you've got about 40% of the S&P 500 earnings being reported in the next week or so. So there's a lot of things going on in markets and so on. In the Ask TPG question section, I added something in there about a question I got the other day regarding using an index ETF on the municipal bond side as a solution because the internal cost is low. And why wouldn't we take that into a

factor instead of, say, a mutual fund that's actively managed or a separately managed account where individual bonds are traded on an active basis? And of course, the answer is the same as the bond side as it is on the equity side. We want active management. We don't want to own the index. Internal expense is basically between the two is somewhat negligible anyway. And the value that's created with having intentionality, being able to position in the credit spectrum, being able to position on the yield curve and target a certain duration. All of those things are what's added value year to date from a return standpoint, but it's part of our philosophy. It's what we believe. We're just not indexy folks. I've always been a little bit shy on the exchange traded fund side on illiquid assets. So whether it's fixed income like

municipal bonds that don't trade every day or even every week, it's hard to have a security trade intraday with stuff that doesn't trade for a week or two. So I don't like it for that reason either. But a lot of that stuff is just our methodology and the way we look at managing money. I'll take a pause here. I will let you go for the evening. We do have ADP private payrolls out tomorrow. And then like I said, non-farm payroll and unemployment coming out at the end of the week. But with that, I will let you go, let you get into your evening and reach out with questions as you always do. Thank you very much. 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.

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