The Dividend Cafe - The Dividend Cafe Wednesday - June 26, 2024

Starting point is 00:00:00 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 is Wednesday,, at least in stocks, but mixed and bonds sold off a little bit. The 10-year was up roughly seven basis points or so on the day, but quiet day overall. We're now at the midpoint, essentially, I guess at the end of the week through 2024. This is about the 13th best first half of the year since 1950. So it's a decent start to the year. I'm talking about the S&P here, not the Dow. And when you put the top first 20 first halves of the year together and compare them generally on average, at least they're up about seven or so percent for the remainder of

Starting point is 00:00:55 the year. That's not anything predictive necessarily, but it's food for thought as we get into the second half. New home sales on the economic front were down 11%, 11.3% for the month, and are now down 16.5% year over year. We posted 619 on an annual rate on new homes. We were expecting 640. So it's quite a big disappointment on some real estate numbers. It was driven, interestingly, by a lot of the Northeast. Sales were down over 40%. Interestingly, by a lot of the Northeast, sales were down over 40%. So inventory overall nationwide is up 14% just in the last month. So what we're seeing is still a very stuck housing market.

Starting point is 00:01:35 Obviously, yesterday I reported on prices hanging in there just fine. In fact, they're still up and at all-time highs. But there are some of these sort of cracks beginning to show inside of housing with higher interest rates. I talked a little bit about the market from a sector rotation point of view. And basically some things like energy, rates, industrials, materials, even healthcare have started to look better the last month or so, and frankly are poised to have a bigger upside or tailwind, at least in revenue in the second half of the year. And I would suspect that is what may support markets more as far as a brightening perspective versus some of the momentum names, really technology that drove the first half.

Starting point is 00:02:13 There was a question in there about electric vehicle exposure and does TPG have any, and do we plan on adding anything particularly to a certain name in there. Look, we're not closing the door on anything right away just for the sake of it. But when you look at sort of fundamentals, where valuations lie, where free cash flow is, and certainly a dividend, it's just not a space that has attracted as much. And the name that was mentioned has laid off about 10% of its workforce, has year-over-year sales declines, and some limited models when compared to some of the big legacy names out there. And so from a market share perspective, there's just a lot more upside with a lower bar on some of the big names than maybe a couple of

Starting point is 00:02:57 the EV manufacturers themselves. But all that to say, the financials just aren't driving a real compelling story for TVG at this time. We also do have plenty of other exposures to the space. And an example that I threw out there was just some of the large integrated oil companies that we own having a broadening of exposure in a lithium production. And that provides what is needed for things like cell phone batteries and, of course, EV batteries, things like that. But all that to say, it was great to be with you here all today on Wednesday, midway through the week and almost midway through the year. Reach out with your questions

Starting point is 00:03:31 and we shall speak to you soon. Thank you very 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 services are offered through Hightower Advisors LLC, a registered investment advisor with the SEC. Securities are offered through

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The Dividend Cafe - The Dividend Cafe Wednesday - June 26, 2024

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