The Dividend Cafe - The Dividend Cafe Wednesday - May 15, 2024

Episode Date: May 15, 2024

Market Update: A Positive Turn with Cooler Inflation Numbers This episode of Dividend Cafe provides a financial market update for Wednesday, May 15th, marking a positive trading day with the Dow up by 349 points and a rally in bonds. The episode highlights a cooler than expected Consumer Price Index (CPI) for April at 0.3%, indicating a positive trend in inflation rates. The Producer Price Index (PPI) showed mixed signals with March's deflationary revision and a hotter April. These figures suggest a potential 2.8% year-over-year Personal Consumption Expenditures (PCE), which is crucial for Federal Reserve considerations. Despite lower than expected retail sales and a contractionary Empire Manufacturing Survey, the episode suggests these are potentially positive signs for the Fed to lower interest rates. 00:19 Inflation and Economic Indicators Update 01:17 Retail Sales and Manufacturing Insights 01:54 Closing Thoughts and Tomorrow's Preview 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. Hello and welcome to Dividend Cafe. This is Wednesday, May the 15th. In what was a generally positive day in trading for the session, we had the Dow closing up 349 points and bonds rallied as well. We had 10 year down, 10 basis points to 434 on the day. And what was behind it was a cooler than expected CPI number. So we got a consumer price index that came out at 0.3% for the month of April for both

core and headline, which was better than 0.4% expected. And it's obviously a positive sign for what was widely anticipated to come out for the day, which was another than 0.4% expected. And it's obviously a positive sign for what was widely anticipated to come out for the day, which was another inflation rate. Yesterday, PPI was a bit of a mixed bag with March being revised to a negative number, which is deflationary, and April coming out hotter than expected. So the combination of these two things, if you calculate both PPI and CPI together, you can get a decent picture on where PCE, which is what the Fed looks at the most, will come out in two weeks' time, which is around 2.8% year over year. All this to me suggests, again, moving in the right direction on inflation and whether the Fed

holds rates here for a period of time longer through September or they don't. At the end, the economy is hanging in there and inflation moving in that right direction, which is good. We did have retail sales come in lower than expected for the day. They were coming in exactly flat, so unchanged at 0%. We were expecting 0.4% on retail sales, which is a little bit slow. And we had an empire manufacturing survey that was contractionary more than expected at negative 15 versus negative 10. Last thing was that we had a NAHB home builder sentiment expected that was bigger drop with higher mortgage rates. So a couple of negative pieces in there with some cooler inflation.

Believe it or not, some of that stuff is bad news looking as good with what the Fed needs in order to start lowering interest rates. So that's your day on the trading day. And I'll be with you again tomorrow. We'll get some more data and share it with you over the Dividend Cafe. Please reach out with your questions as always. Thank you 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 Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered

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