The Dividend Cafe - The Dividend Cafe Wednesday - November 20, 2024

Episode Date: November 20, 2024

Market Recap and Insights: November 20th Edition In this episode of Dividend Cafe, Brian Szytel discusses the mixed market performance for Wednesday, November 20th, with the Dow down 120 points, S&P down 0.1%, and Nasdaq down 0.25%. He provides updates on the 10-year yield, which increased by 2 basis points, resulting in a slightly positive yield curve. Brian also touches on large-cap tech earnings, potential U.S. Treasury Secretary candidate Mark Rowan, and the market's response to previous and potential future Trump administration policies. He highlights upcoming economic data releases, including initial claims, Philly Fed manufacturing data, existing home sales, and University of Michigan Consumer Sentiment PMI data. Lastly, comments from Fed Governors Cook and Bowman on interest rates and inflation are mentioned. 00:00 Introduction and Market Overview 00:47 Economic Data and Earnings Reports 01:06 Political Developments and Market Implications 02:35 Interest Rates and Economic Cycles 03:25 Corporate Tax Rates and Future Outlook 04:25 Upcoming Economic Data 04:42 Conclusion and Sign-Off 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 is Wednesday, November the 20th. Brian Saitel with you here on a bit of a mixed day in the market. The Dow, it's actually the more or less the opposite of yesterday. The Dow was up 122 points. Yesterday, it was down 120. The S&P was down about a tenth of a percent, and the NASDAQ was down about a quarter of a percent. So again, a bit of the opposite from yesterday. The 10-year was actually up two basis points on the day. We closed at 441. And the yield curve, which uninverted, is now 10 basis points positive between twos and tens. So yes, uninverted. I don't know if I'd call that more than a hair over flat, but technically 10 basis points between twos and tens. So there's your market wrap on the day, fairly quiet. As I said yesterday, there's not a lot of economic data out really until the end of

this week. And so yesterday and today were a little quieter on the economic front, but still plenty to talk through a lot of earnings coming out, including some large cap technology names that David wrote about. And you can read through that the stock's down, even though on an earnings beat, this stuff just gets priced to perfection. And that's the comments that we've had about some of those names over for a very long time now. But more to go there with remaining earnings. Some of the talk actually on in the political side, Mark Rowan, who was the ex-founder CEO of Apollo, is looking like more of

a candidate for U.S. Treasury Secretary. There was a meeting today. So we'll see how that unfolds. Obviously, a very smart and connected person in the world of finance and Wall Street, and I suspect would make a good choice. But we'll see how that goes. More talk of how markets will perform in the new Trump administration. And of course, you don't know the future. You can look at the past administration and market when he was in office and try to make some distinctions. But a period of time, 2016 to 2020, right at the onslaught of the pandemic and now being after that, I don't know that I personally draw a lot of conclusions. And I certainly wouldn't draw any from a trading perspective. I certainly wouldn't draw any from a trading perspective. I believe the talk of tariffs will be more than it was this administration. Okay, so there's that. And I think if you look at what did well and what didn't do well, when those policies were implemented last time, I just think it's a stretch to draw a real distinction between what may happen this time. One, because a lot of what was spoken about didn't come to fruition first off.

And then two, just keep in mind that period of time was different. We were just entering a rate hiking cycle, if you remember. 2018 was when the market upturned the apple cart and fell out of bed, at least on the fourth quarter with Fed funds reaching a whopping two and a quarter percent. So we had rising interest rates around that period of time in that administration. They since came down after that when markets wouldn't accept them. But this is different. We have post-pandemic realities coming out of supply chain issues that have alleviated global trade and manufacturing and these things. And we've also had a rate tightening cycle all the way up to five and a quarter on the Fed funds, now coming down already 75 basis points.

So take that for what it is. Different periods of time, different market, different macro, and just different things in the economy are happening aside from what is in the White House or who's in the White House. The one thing I will mention though is corporate tax rates being lowered then, the average corporate tax rate 2013 to 17 was just over 26%. And if you look at what it is now, it's just over 18%. So those policies on the tax side put in place really did make a pretty big difference in what corporations pay in their taxes. And so if that changes in this new administration or goes even lower, time will tell, but it was a meaningful impact the first time. There was a couple of Fed governors talking. Fed Governor Cook said that rates would be in a downward trend, but the timing

would be around the data, not a set calendar. And Bowman noted that the progress that we've made on inflation is starting to stall and just should be cautious about proceeding on any given set path. I think they're all pretty intuitive, normal comments and not, frankly, very market moving. But Thursday, we'll get initial claims, which is tomorrow. We'll get the Philly Fed manufacturing data. We'll get some existing home sales. And then we'll have some PMI data and the University of Michigan Consumer Sentiment to cap off the week around Friday. So more data

to come for you tomorrow. With that, I'm going to let you go for this evening. I wish you all well and hope to hear from 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 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

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