The Dividend Cafe - The Dividend Cafe Wednesday - September 11, 2024

Episode Date: September 11, 2024

September 11 Market Update and Inflation Insights In this episode of Dividend Cafe, host Brian Szytel begins with a somber remembrance of the September 11 terrorist attacks, offering thoughts and prayers to those affected. He proceeds with market commentary, noting an initial drop and subsequent recovery, likely influenced by the recent debate between former President Trump and Vice President Kamala Harris. Szytel discusses key inflation data, highlighting that the Consumer Price Index (CPI) numbers are in line with Federal Reserve targets. He also touches on the implications for upcoming interest rate decisions and the balance sheet. Finally, Seitel provides a preview of forthcoming economic data, including initial jobless claims and the Producer Price Index (PPI). 00:00 Introduction and Remembrance of 9/11 00:33 Market Opening and Debate Impact 01:05 Market Performance and Analysis 01:51 Inflation Data and Federal Reserve Expectations 03:34 Upcoming Economic Indicators and Closing Remarks 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, September the 11th. Brian Saitel with you here as always, and good to be with you. And before I get into the market commentary on the day, just a note for all of those that were directly affected by the September 11th terrorist attack 23 years ago. My thoughts and prayers go out every year to you. And I certainly know where I was and what I was doing exactly at those awful moments that we all witnessed on television. A lot of us firsthand.

So somber day for us as Americans here on September the 11th. With that aside and into markets, we opened the day actually quite a bit lower on the morning. There was a couple of different nuances in markets. Some individual stocks were down quite a bit on different pieces of news, but it was following the debate of the previous evening between former President Trump and current Vice President Harris. And some of that may have moved markets a little bit. But frankly, by mid-morning and then certainly through the close, most of that was shrugged off. And we ended up closing quite a bit higher on the day. The Dow was up 124 points. The S&P was up over a percent. And the NASDAQ was up over 2% on the day, with the 10-year just up about a basis point at 3.66%.

So, gosh, you know, how to relate what the debate did or didn't do in markets, frankly, I think those that were looking for Harris to do better than Trump got what they wanted. I think those that are fans of Trump are still fans of Trump, and the polls definitely show that Harris was the victor. But since it's still a 50-50 election at this point, it's a very tight race. We've got several months here to go before the election. So I think the markets are moving past it as they should onto what fundamentals are. And from a fundamental perspective, we had inflation numbers out today. CPI was out on the headline number at 0.2% for the month, which was exactly what was

expected. We're now at a 2.5% year-over-year number on inflation. This is right around where the Federal Reserve was targeting, pretty close. And then on core, if you move out things like food and energy, which are more volatile, you actually got a slightly higher number at 0.28%. So rounding it up, you got 0.3. We were expecting 0.2, but the year over year number was exactly in line at 3.2% year over year. So there you have it. Inflation is in line. The disinflation narrative is largely completely intact. The odds on a 50 basis point rate cut on the 18th, which is a week from today, I guess, next week went down. They're now at a 17%

chance on a 50 basis point cut. So we're looking at a 25 basis point cut. And I don't know that the market necessarily cares whether it's 25 or 50. As I said yesterday, I believe it's more market friendly to have it be a 25 and not a 50, because I think it'll show markets some confidence from the Fed that things are going fine on the growth side, on the employment side. If we do 50, then maybe some of that confidence is taken away. But all that to say, inflation is in line what was expected. And there you have it. There's still 100 basis points priced in before the end of the year. And then there's another 125 basis points by the end of 2025. So next week will end up being somewhat of a nothing burger, whether it's 25 or 50. I do think they'll start talking about the balance

sheet. And I think that could be more market moving and market sensitive, whether they're going to stop quantitative tightening, which they probably will, and some of the comments on the balance sheet. So we'll be paying attention to that. With that, I'm going to let you get back in your evening here this Wednesday night and reach out with your questions. As always, tomorrow, we'll have initial jobless claims. We're expecting 225. We'll have PPI where we're expecting a 0.2% increase for some more inflation data for

tomorrow. So with that, I shall let you go. If you happen to be watching Yahoo TV, Yahoo Finance TV tomorrow morning, I'll be on between 9 and 10 a.m. Eastern. So for any of you that want to log in and hear that, please do. Otherwise, I'll be back with you on Do It In Cafe tomorrow. Have a good evening. 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, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered through Hightower

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