The Dividend Cafe - Thursday - January 15, 2026

Episode Date: January 15, 2026

In this episode of Dividend Cafe, Brian Szytel provides a daily market recap for January 15th, highlighting a positive day across indices such as the DOW Jones, S&P 500, and NASDAQ. Key economic insights discussed include lower-than-expected jobless claims, strong manufacturing survey results, and the performance of semiconductor stocks. The episode also explores reasons why markets continue to climb despite various economic concerns, emphasizing financial conditions, Fed balance sheet policies, fiscal stimulus, and deregulation in financials. Brian addresses a client question on Fed independence and the potential implications of administrative actions on market volatility, underlining the importance of maintaining diversified portfolios to navigate uncertainty. 00:00 Introduction and Market Overview 00:42 Economic Indicators and Job Market 01:24 Manufacturing and Semiconductor Updates 01:51 Year-to-Date Market Performance 02:11 Climbing the Wall of Worry 03:23 Financial Conditions and Fiscal Stimulus 04:45 Fed Independence and Market Implications 06:06 Conclusion and Final Thoughts 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 Thursday, January the 15th. Brian Saitel back with you here for your daily recap. On a positive day, actually, markets more or less across the board. I'd call it modestly so. You had the Dow Jones up about 292 points. S&P was up a quarter of a percent, as was the NASDAQ. So you still had that continued performance in some of the more blue chip or value-oriented components of the market. Ten-year yield was up a couple basis points. So you've seen rates started to creep back up here a little bit.

There's obviously been some media attention about Fed Independence, and there was a question that came in from a client that I'll answer in a second. Generally positive day overall in markets, there were a couple of things in the economic calendar you had. Initial jobless claims beat again, so we've been watching this. We were at one point flirting with the mid-200s. This was maybe seven months ago, eight months ago, and we started to trickle back down, post-government shutdown.

But we've been below 200,000 now for a few weeks. So we're at 198 versus 215 expected. So that's pretty healthy. A job numbers continue to remain in check. And that's why that Fed futures number on when the next rate cut is going to be, it keeps getting pushed out. So we're at 70% chance at June at this point. And part of that's because inflation is still in that sort of

a high 2% range and you've got the employment numbers that continue to be okay and remain in check. The second piece out for today, a couple of manufacturing surveys, there was the Empire State Manufacturing Index, which beat Handily in the month of January, and then you also had the Philadelphia Fed Manufacturing Survey come out much better than expected. So for the most part, on jobs and on manufacturing, both those things were good. You also had some positive setup and some of the semiconductor names. And there you have. You did an update overall in the markets. And on the year, just to keep track here, we're now, this is January 15th, so we're a couple

weeks in. You've got the Dow up about 2.9 percent, S&P up about one and a half, NASDAQ of about one and a quarter. So the way you saw 2025 end is now reversing it going the other way and the Dow is catching up because of those other reasons that I mentioned. So there you have it. So why do markets keep climbing this wall of worry was the question that was on my mind today and what's on Brian's mind?

The reality is Q4 GDP is supposed to come out. Ranges are pretty wide. SMP Global has it at 1.9. Atlanta's Fed GDP now estimate, which is very popular and well-respected one, is all the way at 5.3. So however you slice it, 2025 is going to end in very positive territory from a growth perspective. That's great. We also had earners per share, grow in the S&P 500, and you had margins expand. All those things were positive, but that's last year.

That's not for this year. Why is the market continuing to climb this wall of worry? We have all the stuff going on. You've got geopolitical tensions. You've got the Fed independence underscruency. You've got debt. All of the different things that are worrying people, dollar decline, all these different things. So why are markets continuing to climb that while of worry?

And the answer is actually that even though you're going to have a decline in CAPEX growth in AI, and that was the big driver in 25 and frankly in 24, doesn't mean that it's going to decline. It means that the growth rate. rate is going to decline. So it's still expanding just in a slower rate. How are market still advancing even though that's going to happen? Part of the reason is because financial conditions really are getting a little easier. So we went from quantitative tightening all last year now into quantitative easing. So I'll call that a headwind from last year turning into a tailwind on that front with the Fed balance sheet. And you could say for better or for worse, but nonetheless,

historically, the correlation between expanding Fed balance sheets and risk assets have been very positively correlated. You also have a declining rate policy on the Fed side. Both of those things are positive. And then you've got a pretty meaningful amount of fiscal stimulus coming in the first quarter, which is going to hit the next 60 days. It's about 150 billion dollars roughly. This isn't the form of tax cuts from OBBB. And a lot of that stuff was on the expensing side for businesses. And then on the consumer side, it was also more to be realized when you fire in return. and that's just going to happen here in the next couple months. And then aside from that, you've got deregulation in the financials.

This is just lowering some of the bank requirements that should spur some lending, ideally. Those things are all positive. And the way that we're looking at this is just markets get ahead of themselves historically, almost always. And so the way that we're dealing with this is to own the multitude of asset classes and just to own dividend growth. And some of the sleeves in the portfolio that we feel aren't just predicated on a rise in tide lifting all boats. That's how we're playing. That's how we always play it. The question in there was about Fed Independence. What happens if Trump gets what he allegedly wants and is able to indict Powell on criminal charges and use the DOJ as that weapon? Doesn't that mean that stocks would sell off on

Bonsor Rowley, basically, is the question. So look, I'm not going to prognosticate here because we don't know what will happen in that front. My guess, though, based on just a history of it, is that there's rhetoric and there's jawboning from the administration and then nothing happens and it's toothless. And so that's what I believe will happen. And I know that because that's what Trump said today, that he has no plans on firing, Powell. That aside, it's been a huge topic in the news. And it's hard to know exactly how that would play out as far as the markets.

I think all bets are off. It hasn't happened before. So I'm not going to pretend to know the answer when I don't. And I don't think you should listen to people that pretend to know it either. What I do know is markets don't like uncertainty, and that would create a ton of it. So, yeah, I'd imagine volatility would pick up. And again, the way that we would deal with that is to make sure portfolios are aligned from an asset allocation standpoint on the front end so that you can go through those

periods of uncertainty. Ideologically speaking, the Fed independence is hyper important to the way this system is trusted, and if that is threatened in a meaningful way, then I think that is bad, generally. And I think that would play out poorly for all those actors. That said, that's not my base case. So not something I'm losing sleepover right the second. That's my answer for you today. That's my around the horn for you today.

And that's my Thursday evening for you today. So I'll let you get into your night and I wish you a good one and reach out with your questions. We'll talk to you soon. Thanks so much. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and 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.

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