The Dividend Cafe - The Dividend Cafe Wednesday - October 30, 2024

Episode Date: October 30, 2024

Market Recap: Earnings, Payrolls, and Economic Data In today's Dividend Cafe episode from October 30th, Brian Szytel provides an overview of the current market trends from West Palm Beach, Florida. The day saw a slight market downturn despite positive data on earnings and economic indicators. The ADP private payroll report exceeded expectations, with new private payroll gains at 233 compared to the expected 113. Interest rates slightly increased, closing up three basis points on the 10-year note. There was also better-than-expected preliminary third-quarter GDP growth at 2.8%, driven by consumer spending. Brian discussed market sensitivity to interest rates and the upcoming PCE inflation read and non-farm payroll report. The episode also addressed the complexities of trading around the election and a question on energy rig counts and productivity. Looking ahead, Brian will return to discuss the implications of the PCE data on the economy and markets. 00:00 Introduction and Market Overview 00:18 Economic Data Highlights 00:40 Interest Rates and Market Reactions 01:11 Upcoming Economic Reports 01:24 GDP and Consumer Spending Insights 01:58 Election Trading Strategies 02:43 Energy Sector Update 03:05 Conclusion and Upcoming Topics 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 30th. Brian Seitel with you here from our West Palm Beach, Florida office. Slightly down day in markets. We actually were up at least on the Dow mid-morning about 200 points and gave a lot of that back throughout the trading day. There was a good amount of earnings that had come out today, but on the economic side, there was ADP private payroll number that came out. We were expecting 113. We ended up with 233 on new private payroll gains. The non-farm payroll report and unemployment

rate on Friday will be more telling than the private report today, but still, it was quite a bit better. Interest rates were lower before the report. They actually moved just a little higher afterwards. We ended up closing up three basis points on the 10-year at 430, which seems to be the point, by the way, in which markets are paying a little bit more attention. I know we wrote about this, or David did, about the 450 mark being that market sell-off point potentially, if rates got up that high, which isn't very far from here. And I agree completely. I still think there's some jitters that start around the 430 level. At least that's what I've noticed last couple of trading days. So keep that in mind. Tomorrow, we will have a PCE inflation read, which is very heavily watched by the Fed. And so that

can move things a little bit. And then of course, employment on Friday. So more data coming to you down the pike. Today, we also had a preliminary read on third quarter GDP. And we were expecting 2.6. We got 2.8. So GDP, at least the first glimpse of it for Q3 came out stronger than expected by 0.2. Inside of that, no shocker here, but inside of that, the reason was consumer spending was a little bit better than expected on that front. So generally positive data, both of those numbers are better than expected, both GDP and also private payrolls. And you got a market sell-off, which is good news being bad news, that whole thing.

It seems to be back here a little bit, at least intraday. But David had a nice point in there this morning in his write-up about trading around the election. And ultimately, there's too many unknowns and variables. I've written about it as well. There really isn't a discernible way to navigate it, even if you knew who the outcome would be. I still don't know if it would be a very telling and easy way for you to trade around these things. And so the better way to approach it is to have things set up beforehand, to not worry about the day-to-day noise and make sure the allocations are correct and so on and so forth. Of course, if things change, we'll be able to take advantage of

those things, but there's nothing to really try to game in front of what may or may not be a result on Tuesday, what may be a result a week from then or even longer. We don't know exactly when the ultimate result will be known. The other question that came in was on just energy, which is another topic du jour on the rig count. And the reality now is while the total rig count is actually still lower than the pre-pandemic era, the amount of productivity from each rig is higher. And so there's a record amount of oil being produced, but still a lower amount of rigs that are out there. So there you have it. A little walk around the horn on the day. Again, today's Wednesday, so I'll be with you tomorrow on Thursday. We're going to talk about

PCE and what that means for the economy and the market. Reach out with your questions, as you always do. I wish you a lovely evening. Thank you. 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. Advisory services are offered through Hightower Advisors LLC.

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