The Dividend Cafe - The Dividend Cafe Wednesday - May 1, 2024

Episode Date: May 1, 2024

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, the first day of May. And we had kind of a mixed close on the market for the day. We were actually up about 480, 500 points at the high of the day. We ended up closing basically mixed. The Dow closed up 87 points on the day. The NASDAQ and the S&P were both down by about a third of a percent.

Big news on the day was that the FOMC meeting ended today and Powell left rates unchanged, which was largely telegraphed and expected. He did actually lower or decrease the monthly cap of treasuries that is running off of the Fed's balance sheet and what is quantitative tightening from $60 billion on treasuries down to $25. So he reduced the rate, we'll call it QT light. And the agencies that are running off at $15 billion will just continue. And again, they want to have a balance sheet that is just treasuries without agency mortgages in there. So that's sort of the pace there where they're slowing it down a little bit. Most of the presser afterwards, he did get asked if it was possible

to have a rate hike at some point. There was a couple of people out there, Fed presidents, mentioning that it could be on the table. And he took that off of the table for any of those that were worried about that. We were not worried about that. So that's off of the table. By and large, it was slightly less hawkish than it could have been. You know, yesterday we had our big drawdown day in markets. And again, today I started out or we started out as a rally that just sort of fizzled towards the end of the day. The economic news on the day was the ISA manufacturing slightly disappointed. It was at 49.2. Remember, anything less than 50 is contractionary slightly

in the economy. So, manufacturing cooled a little bit, but we had ADP private payrolls come in at 192,000, which was ahead of 175 expected. So, continued really resiliency and strength in the employment side of things. All in all, what did this kind of give us? Well, interest rates earlier on the day were down. The 10-year dropped 10 basis points and ended up closing down just four basis points at 463. So things calmed down. We ended up with sort of a flat day on the market, and Fed futures are priced in still with a decrease in rates starting in Q4. priced in still with a decrease in rates starting in Q4. So with all of that to say, we can now start to refocus again. Not that we ever weren't focusing on this on earnings as they come out. So there you have it for a Fed Day report. And thanks for listening very much. I appreciate

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