The Dividend Cafe - Thursday - August 20, 2026

Episode Date: August 20, 2026

Brian Szytel reviews a down day in markets (Dow -703, S&P -0.8%, Nasdaq -1%) and notes blue-chip weakness despite better-than-expected earnings, attributing it to consumer budget pressure from higher energy prices. He discusses yield-curve moves with short-end yields rising more than the long end after Treasury talk of buying back longer-dated bonds funded by T-bills, framing it largely as signaling with political relevance to midterms, gas prices, and housing affordability tied to long rates. He previews Jackson Hole as unlikely to deliver major Fed guidance and highlights strong data including the Philly Fed Manufacturing Index (47.4 vs. 25 expected) and slightly better initial jobless claims (206 vs. 210). He answers a viewer question on inflation-proofing dividend returns, emphasizing dividend growth stocks whose rising cash flows can outpace inflation and compound over time. 00:00 Market Wrap Overview 00:21 Consumer Strain Signals 01:05 Yield Curve Moves 01:12 Treasury Buyback Politics 02:03 Jackson Hole Preview 02:26 Economic Data Highlights 03:06 Rates and Growth Context 03:33 Inflation Proof Dividends 04:06 Dividend Growth Math 05:03 Closing and Weekend Signoff Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Welcome back to Dividend Cafe. This is Brian Saitel, your host this evening. On a down day overall in markets, and somewhat meaningfully, the Dow is down 703 points. These days, that means 1.3%. SMP was down 8 tenths. Nasdaq was down 1%. So, kind of a mixed bag there on what sold off. There was some large blue chip names that sold off on earnings that were actually better than expected with raised guidance. This is the largest retailer in the country that I'm talking about. But the stock was still down because of some of the shifting and budgeting constraint on the consumer with higher energy prices. And you're starting to see that in some of those numbers. And my comment was, don't take that too lightly. Those things, when we're going into a midterm election cycle, are very important. And it's always been the case that gasoline prices matter as much or more than anything else to the consumer because it literally just acts as a tax on their ability to buy other goods and services. And you're seeing that in the numbers that we saw today. So that reverberated a little bit. And then he also had pick up in the yield curve. It actually picked up more on the short end than the long end as far as yields go. Remember yesterday, the Secretary of Treasury

said that they were going to buy back longer dated bonds. So call it 20 to 30 year treasuries using the money they're getting financing T-bills, so short-term, and they were going to target something like $20 billion annually. That said yields down yesterday, and of course they just went right back up today because I think some of the math kind of sunk in. That said, the long-end is still down from where it was, so you haven't recovered all of it, but nonetheless, when you're talking about $5 trillion of long-end treasuries and you say you're going to buy $20 billion or change the composition, it's more signaling. There's some political nests. to that as well, from an election standpoint or a political standpoint, when you have gas prices

are important and home affordability is important. And of course, the latter, very tethered to those long-term rates. And so there's an agenda to try to keep those long-term rates down. It'll be interesting. We have Jackson Hole coming out. Historically, different Fed presidents have used Jackson Hole for sort of a mid-meeting announcement of some kind. I really doubt that's what Warsh is going to do here. I think they'll talk about the economy and he'll do his thing, but I don't think there's going to be a telegraph or any sort of guidance. He's explicitly said he's not going to do that. So we'll see if that's a meaningful market-moving event,

but that's not until next week. And in the meantime, you just have some more economic data that's coming out. You have continued just the tail end, really, of earnings coming out, and you have technically most of those things are pretty good. In fact, today, when you saw the Philly Fed Manufacturing Index, much better than expected. This was the highest number that we've seen in, years, so very robust, basically double what was expected. And again, that's just one, one area and one

survey. Nonetheless, we got a 47.4 versus a 25. And then he also had initial job list claims today that were a little better than expected. We got a 206 versus a 210 number on employment. So those things are both, I would say, good numbers. Rates going up today, so be it, a tenure was up six basis points. We're at 470. And it's not just about inflation and energy in Iran and all those things. Remember, This is the silver lining to this. Higher growth expectations typically do come with higher interest rates. And as I said yesterday, 470 on the 10-year or 525 on the 30-year just isn't really historically all that high. So I think people have gotten a little jaded here with what they're used to.

All that to say, the question that came in last night, and I've got a stockpile of question. So I appreciate you guys sending them in, and I'll get back to you just as soon as possible. But the particular one that I included in today's, which I thought was a very good one, was a longer comment, but with a good question embedded within it, which is, how do you inflation-proof dividend returns? And obviously, inflation topic de jure these days, but the nice thing about what we do is it's inherently inflation-proof, because the dividends that we're buying are not just static. They're growing. In other words, the way that you protect against your

decline in purchasing power as inflation erodes that away is to have a cash flow that increases at a higher rate than inflation. And that's what dividend growth stock. do. My example was if you had a 3% yield today, but it was growing at 7.2%, your cash in dollar terms yield is going to double every 10 years. Even with inflation, the purchasing power is not only protected because of just by math, right? Inflation is going to average two and a half to maybe three at the most. If you're growing the dividend at about 7% that's double, then not only is it protected, but it's going to significantly expand over time and allow you to do all the things that like later in light and have this engine working for you day in and day out. It's a compounding

mechanism. It's a machine and we just love it so much. It's also tax efficient, by the way. So that's how I would inflation-proof dividend returns. That's my answer for you today. I'll keep it a little short and sweet for you just because that's most of what I had to go through with you. But I wish you a good weekend if I don't speak to you and hope to hear more of your questions. Please reach out. And if I don't hear from you, thanks for listening to the Dividend Cafe. The Bonson Group is a group of investment professionals registered with High Tower Securities LLC, member FINRA and SIPC, and with High Tower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through High Tower Securities LLC. Advisory services are offered through High Tower Advisors LLC.

This is not an offer to buy or sell securities. No investor process is free risk. There is no guarantee that the investment process or investment opportunities referenced Turin 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, or other information contained in this research is provided as general market commentary and does not constitute investment advice.

The Bonsor Group in Hightower shall not in any way be liable for claims and make no, expressed, or implied, representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or emissions from the update. contained data and information referenced here in. The data and information are provided as of the date reference. Such data and information are subject to change without notice. This document was created for informational purposes only, the opinions expressed, are solely those of the Bonson Group and do not represent those of Hightower Advisors LSC or any of

its affiliates. High tower advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client's individual circumstances and can change. at any time without notice. Clients are urged to consult their tax or legal advisor for any related questions.