The Dividend Cafe - The Dividend Cafe Wednesday - May 22, 2024

Episode Date: May 22, 2024

This episode of Dividend Cafe offers a commentary on the recent market downturn, noting a 201 point drop in the Dow and a slight rise in volatility. The Federal Reserve's May meeting minutes are discussed, revealing some disappointment in inflation data but maintaining a medium-term 2 percent inflation target. The episode also covers lower than expected April existing home sales, likely due to tight housing inventory and higher rates, yet notes a 5.7 percent year-over-year price increase. UK inflation rose slightly more than expected to 2.3%, attributed to weaker economic fundamentals compared to the US. China's potential increase in tariffs on large autos from the US and Europe is mentioned, seen as a tit-for-tat move against the Biden administration's tariff raises. Additionally, the episode previews economic indicators to be released the following day, including jobless claims and PMI numbers. The Bonson Group's role as investment professionals and the disclaimer regarding investment risks and advice conclude the commentary. 00:00 Introduction to Dividend Cafe 00:18 Market Movements and Federal Reserve Insights 01:16 Housing Market Dynamics 02:10 Global Economic Indicators: UK Inflation and China's Tariff Strategy 02:48 Looking Ahead: Economic Calendar and Closing Thoughts 03:10 Disclaimer and Professional Advice Notice 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. It is Wednesday, May 22nd, and we had a down day in markets today. And although we did close off of the lows, we still notched about a 201 point drop in the Dow, a little rise in volatility. So a bit of a down day. And really it was minutes out today from the May meeting from the Federal Reserve that I didn't particularly read as overly hawkish. They were sort of middle of the road, but they did point to being disappointed. Most of the Fed governors were disappointed in the inflation data. There were a couple of them that cited a willingness to actually raise rates,

although Powell has been very outspoken about there'd be a very high bar for that. So I don't think that is likely at all. The Fed futures for September changed a little bit lower, but not much, not even enough to really mention. So I suppose that was the bad news that caused markets to go lower on the day. The takeaway, by the way, from the minutes was the bad news that caused markets to go lower on the day. The takeaway, by the way, from the minutes was still very much that a 2% target will be achieved over the medium term, pretty much across the board. So there you have it. April existing home sales on the day were lower than expected. We were down 1.9% month over month. Again, a very tight supply in inventory market and housing. It's still basically stuck, as I've described it. Housing is stuck with higher rates, and that's where we are.

With prices, though, we still have seen some gains. We've got year-over-year prices up 5.7% year-over-year, which technically is the 10th consecutive month here. So prices have hung in their fine, and the average median or the median price across the country is about $407,000. So for most of you, including myself, can remember it being much less than half than that for many years. That's where we have it in prices. And I suspect once inventory picks up and it becomes a little less stuck in housing with more people being able to move and set some price discovery, we'll see where prices end up there. But for now, that's where we are. There was a little higher than expected UK inflation number out today, but they're still at 2.3%. They were expecting 2.1. Comparatively to the US, they're trending lower. And I'll say

for the wrong reasons, which is that fundamentals in the economy there are weaker than in the US. So there you have it there. China did talk about having an increase in tariffs on large autos from the U.S. and Europe. They were talking to 25 percent. We'll got a flash PMI number in both services and manufacturing that will be out, and then some new home sales. So a decent day tomorrow in the economic calendar. And with all that, I shall go through it with you again tomorrow. And I wish you all a lovely evening. Thanks for listening. 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.

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