The Dividend Cafe - The Dividend Cafe Wednesday - July 10, 2024

Episode Date: July 10, 2024

Market Updates & Economic Insights — July 10, 2023 In the latest episode of Dividend Cafe, Brian Szytel discusses the positive performance in the stock markets, with the Dow, NASDAQ, and S&P all up by over 1%. The episode covers the seventh consecutive session of gains for the S&P and NASDAQ, and touches on bond market updates including a positive 10-year auction. Key economic events include Jerome Powell's testimony on inflation, wholesale inventories data, and upcoming CPI figures. The episode also delves into Japan's unique monetary policy approach and its economic implications. Looking ahead, the focus will be on initial jobless claims and the new CPI data release. 00:00 Market Update: July 10th 00:32 Positive Trends in Stocks and Bonds 00:45 Federal Reserve Insights and Economic Indicators 01:42 Anticipation for CPI Data 02:04 Japan's Unique Monetary Experiment 03:56 Looking Ahead: Jobless Claims and CPI 04:01 Closing Remarks 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 Wednesday, July the 10th. It's Brian Seitel with you here. Today on a nice up day in markets, the Dow closed up about 429 points on the day, which was over 1%. We actually had 1% up across the Dow, the NASDAQ, and the S&P on the day. The S&P and the NASDAQ were up. This is the seventh straight session that they've been up, and they technically recorded some intraday all-time highs. So a positive day in stocks, and then also when bonds rallied a little bit, There was a positive 10-year auction, about $39 billion that went off. Rates are down about one basis point, closed at $4.28 on 10s.

So other than that, fairly positive day. Uninventful, for the most part, in the economic calendar, there was a testimony from Powell to the House where he basically said that he doesn't need to see 2% exactly on inflation. He needs to see and be confident that the trajectory to getting to 2% is happening. If you wait until 2%, you would overshoot it, in other words. So it's like the whole skate to where the puck is going idea there. Obviously, it's intuitive and makes sense, but I guess healthy that he's including some of these things in his narrative now on decreasing interest rates. We also had wholesale inventories, had a positive month.

They were at 0.6%. It's a little bit counterintuitive, which is you get a build in wholesale inventories and it's showing you a little leading indicator on potentially some softening in consumer demand there, but it was 0.1% the month prior. So that's where we are there on the day. Tomorrow, it seemed to me that the market melted higher throughout the end of the session, just in hopes of a good number for tomorrow. But tomorrow is a CPI day. So we get a new read on some inflation data that markets will pay a whole lot of attention to. And markets ran up today in anticipation of what could be a decent number for tomorrow. The comment I had in there wasn't necessarily market related for the day. It was about the

interesting monetary experiment that we're witnessing unfold in Japan. The rest of the developed world obviously has increased interest rates because inflation was out of hand pretty much across the board. And Japan has been the only developed country that really didn't. They did raise rates from a negative number to a slightly positive number at 0.1%, but they've kept them there even though their inflation rate has averaged or stuck around the high two level, which for them in that country is higher than it's been in decades. There's some things that seem like they've probably gone to plane, which is that the currency has weakened dramatically. The yen is now at 16 probably gone to plan, which is that the currency has weakened dramatically.

The yen is now at 161 versus the dollar, which is about the weakest level we've seen since the mid 80s. The stock market average there, the Nikkei, because it's an export led economy, really, they sell things around the world, is appreciated back to where it was in the mid 80s. Really more like the late 80s, early 90s. But the point is that it's up. And so in some ways, they may have been happy about that. And actually, the economy has done better than it has recently, it's picked up a little bit. But what we're seeing in GDP now, with some weakening in the economy also happening now, is while nominal GDP has ticked a little higher, because inflation, they're letting it run high. Real GDP is negative. And so they've had a negative net quarter if you net out inflation, and they're likely to have

another negative quarter in a row, which is a technical recession. So there really isn't a free lunch in this monetary game that they're trying to play here. And I guess my point is just, frankly, there's just a lot of alphabet soup here and moving parts when the rest of the world is going to be easing policy likely over the next, call it five to six months. So we'll have to see and grab your popcorn on how that plays out in that part of the world. But I'd be shocked if you saw the Nikkei and the Yen maintain these levels given all that that's going on. So that's what was on my mind for today. Tomorrow, we have initial jobless claims, but then again, just that CPI number that we'll pay attention to. So I'll be back on Dividend Cafe. Thank you for your questions. Please send them in. Take care. Bye-bye.

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 expressed 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.