The Dividend Cafe - The Dividend Cafe Wednesday - October 16, 2024

Episode Date: October 16, 2024

Market Update and Economic Insights: October 16th In this Dividend Cafe episode, Brian Szytel from the Bahnsen Group provides a comprehensive market update from their Newport Beach headquarters. Highlights include a positive day for all three major indices, with the Dow up 337 points, S&P rising by 0.5%, and NASDAQ increasing by 0.28%. Interest rates saw a minor dip, while sectors such as financials, real estate, and utilities experienced significant gains. Import prices dropped more than expected, largely due to a fall in fuel prices. Mortgage rates increased by 16 basis points, and a slight steepening of the yield curve was observed. Upcoming economic data includes initial jobless claims, retail sales, the Philly Fed manufacturing index, and industrial production. 00:00 Introduction and Market Overview 00:50 Economic Indicators and Import Prices 01:26 Mortgage Rates and Yield Curve Analysis 02:35 Upcoming Economic Reports 03:01 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, October 16th. And Brian Seitel with you here from our Newport Beach headquarters here in California for the Bonson Group here on Wednesday. We had a positive 337 point day on the Dow, so a rebound from yesterday. We were up about a half a percent on the S&P, a little less, and up about 0.28% on the NASDAQ. So all three indices were positive. Interest rates slightly lower. We had a drop of about a basis point or two on the 10-year. We closed at 4.0. Big move on the day, both in financials, some real estate, and really the utilities were up over about a percent and a half, or actually a little more on the day. Some positive,

more interest rate sensitive sectors on the upside for the day. On the economic front, more interest rate sensitive sectors on the upside for the day. On the economic front, we had import prices in the US fall more than expected. We were expecting the 0.3% decline. We got a 0.4% decline on the month. This is an input price index that comes out. The biggest contributor of that decline was a drop in fuel prices. So the fuel prices were down about 7% on the month. Similar story for last month, by the way. This is for September. So August had a similar story. It was down a little bit more than expected, largely because of energy and a drop in fuel prices. These are generally good things as far as inflation goes, obviously. Not a lot else out on the economic calendar. We get a lot more out tomorrow, but there was a move higher in

mortgage rates on the week. The Mortgage Bankers Association had 30-year mortgage rates now up 16 basis points on the week, which is a pretty good move. We're at 652. Again, these are conforming 30-year loans, may or may not be indicative of what you can get at your local bank for whatever size of money that you're going to borrow. But nonetheless, long-term rates have actually been drifting a little higher. And so you've gotten a little bit steeper of a yield curve. Short-term rates have dropped, obviously, with Fed funds. Long-term rates aren't tied to Fed funds. They move on their own, usually more attributable to long-term inflation expectations and really

economic growth. So steep yield curve is a good thing, not a bad thing. expectations and really economic growth. So steep yield curve is a good thing, not a bad thing. And to give you context, the two-year rate is about 393, 10 years about 401. So really what we're talking about is a whopping eight basis point spread between twos and tens on the yield curve. Not really all that steep as of yet until the two-year comes lower with Fed funds, which should happen here over the next year and a half. With a quiet day and more going on tomorrow, I'm going to leave the rest for tomorrow and let you go on the evening. Tomorrow, we've got things like initial jobless claims. We've got some retail sales, which is

probably the most widely anticipated number. We're expecting a 0.3% increase on the month. There's a Philly Fed manufacturing index. Remember, the Empire State index was quite a bit lower and in contraction territory. So we'll see if that is positive or negative. And then we have things like industrial production out as well. We're expecting a slight decline on that also. So more to come tomorrow. With that, do reach out with questions. Thank you. process or investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices,

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