The Dividend Cafe - The Dividend Cafe Wednesday - October 2, 2024

Episode Date: October 2, 2024

Market Updates and Economic Insights: October 2nd Edition In this episode of Dividend Cafe, host Brian Szytel reports from New York City during his annual asset manager trip. He provides a market update for October 2nd, noting a quiet day for stocks with minor movements in the Dow, S&P, and Nasdaq. Szytel also discusses economic data, including better-than-expected ADP private payroll numbers, and looks ahead to upcoming jobless claims and non-farm payroll reports. Additionally, he delves into China's market trends and the strategy of focusing on individual business fundamentals in the emerging world. 00:00 Welcome to Dividend Cafe 00:22 Market Recap: A Quiet Day 00:48 Economic Updates: Payrolls and Job Openings 01:46 China Market Insights 02:38 Investment Strategy and Emerging Markets 03:13 Upcoming Economic Data and Conclusion 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 the 2nd. And Brian Seitel with you here from New York City. And on our third day here of our annual asset manager trip together, which has been quite productive and just a ton of great takeaways that we're looking forward to having for any of those that are interested after the trip. But I'll save them for at that time. In the meantime, quiet day in markets. We had Dow close up about 39 points. Both the S&P and the Nasdaq were essentially flat, up about 0.08%. So real quiet

in stocks. This is following a sell-off a little yesterday, following some geopolitical tension between Iran and Israel. Obviously, missiles were fired, many shot down, damage averted. Thus far, there may be retaliation, but for now, we're looking at markets looking forward and moving forward. The 10-year was up three basis points on the day. We closed at 378. So there you have it, a little round the horn on some of the indices and some of the markets on the day. On the economic side, you had ADP private payrolls come in better than expected.

We got a 143,000 for the month. And we were expecting 125. So a little better than expected there and continued resilience and frankly strength. This was a fairly broad based number on private payroll growth across most sectors, including manufacturing, by the way, which has been a laggard lately. So those are positive things. Yesterday's number on job openings followed by today on the private payroll, and then both of those things were better than expected. And then this Friday, we'll have the non-farm payroll number come out and the unemployment rate revision. So we'll be

waiting for that. But there you have it on the economic side and the market side for the day. I did write a bit about China. The markets have moved up a ton here the last two weeks, about 25%. I wanted to give some historical perspective of how they've done over a 30-year period, which has only averaged about a 1% total return, even though their economy has grown multiples and multiples over that period of time. And just give some perspective. There's been a good amount of questions and just interest in what's going on there. And the average bull market has been in the 75% range. So big, big run up.

And then the average subsequent decline has been about a 40% pullback following that. And you sort of get the sideways movement. But that doesn't mean that there's sharp ups and downs. And I suppose if you can time what CCP or PBOC is going to do, then maybe there's a trading case that you can make there. But of course, those things are unknowable and unpredictable. So it's a fool's errand. But all that to say, we're finding value in the emerging world. That's not at all what I meant to say. There's plenty of

value. But rather than allocate money country by country based on what you think may happen in the future, we're looking at fundamentals and financials of individual businesses and seeing where we find value and using asset managers who have boots on the ground in those places to help us make those decisions and have our positioning the way that we want it. So that's the way that we're going to play that space and we're going to stick to that.

In fact, we meet with our manager tomorrow, which is GQG here in New York City, and we're looking forward to that. So tomorrow we'll have initial jobless claims come out. That'll be Thursday. We'll have an ISM data update out there as well, both on the economic calendar. And then, like I said, payroll numbers on Friday. So I will be back with you tomorrow on Thursday. And if I don't speak to you, have a great evening. Reach out with your questions. Thank you very much. The Bonson Group

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