The Dividend Cafe - Thursday - January 22, 2026

Episode Date: January 22, 2026

In this episode of Dividend Cafe, Brian Szytel provides an update on the market's performance over the past few days, discussing the recent rally in the DOW, S&P, and Nasdaq. He highlights the ongoing outperformance of small caps and their strong start to the year. The bond market's stability and yield curve trends are also noted. Brian shares his thoughts on the relevance of gold and silver investments, emphasizing a focus on fundamentals and cash flows. Additionally, he addresses a client's question about index funds, discussing their impact on market bubbles and the role of hedge funds. The episode concludes with economic updates on jobless claims, GDP revision, and PCE data. Brian encourages listeners to reach out with their questions. 00:00 Introduction and Market Update 00:37 Small Caps Performance 01:06 Bond Market Insights 01:42 Gold and Silver Analysis 02:58 Discussion on Index Funds 04:19 Economic Calendar Highlights 05:02 Conclusion and Closing Remarks 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. Good evening and welcome back to Dividend Cafe this Thursday, January the 22nd. Brian Saitel back with you here from our Newport Beach, California, headquarters at the Bonson Group. Upday in markets today. This is the second day in a row. Remember Monday we were closed for MLK, Tuesday, Big Down Day based on geopolitical. things in Greenland and tariffs in Europe. And then we've got a rally on Tuesday and now, I'm sorry, Wednesday and Thursday. So Dow was up 306 points and S&P was up about a half of a percent. Nasdaq was up nine-tenths. So it's a little bit of a change up today. We had a rotation the other way,

growth outperformed value. One thing I would note is the continued outperformance in small caps. We've been talking about them being due for a long time. They've just underperformed in a pretty good economic environment and a good market environment. Now they're making some catch-up time. This is the 14th day or session, sorry, trading session in a row that small caps have outperformed SMP 500 and they're up five, almost six percent here on the year versus everything up, call it one, everything else up about one. Yields were, didn't move on the day. We've got a tenure now at 425. For all that we can talk about different charts and different things going on in the world, The bond market really isn't signaling a whole heck of a lot.

The yield curve is steeper absolutely than it has been, but technically this year it's actually flattened just a little bit. And this is going into further easing like we've talked about on monetary policy and then a pretty decent amount of fiscal stimulus coming into the economy. So a lot of things at play here. At the end of all of those things, we've got earnings per share growth estimated at about 14% for this year. And so markets are still looking, glasses half full. What I wrote in there today, as far as things on my mind, the topic of gold, silver, these charts that look almost parabolic the last couple of years, and what they may signal about the future, the dollar, debt, and all these things have been very popular.

My points are twofold. One, look, the charts that we have seen are not likely to repeat. So if you're thinking that you've missed out or that this is where money should be placed because it's going to do the same thing over the next two years, I would just take the under on that. That doesn't mean impossible or it just means improbable. That's the first thing. The second thing is you would need to really tell me the relevance to current day conversation, depending on what your goals and what you're trying to accomplish with whatever investment you're trying to emplace.

I just don't see the relevance in looking at what the price of gold has done in the last couple of years and translated into something predictive and or something immediately investable and offers a grand amount of utility today. And again, I would revert back to calculating an internal rate of return. earn on investments instead of that and focusing on fundamentals and ultimately cash flows. I think that's a better paradigm in how to play current day markets, but most markets in general. That's my comments on gold. I'm hoping it incites some people reaching out because I know there's folks that feel passionate about it in other ways. The question that we had in there today was about, it was a good one. It was from a

client, friend of mine. It was about index funds. An article that was actually in the economist, But it was talking about two things. One, that they cause bubbles because they indiscriminate into buying certain companies that are inside the indexes, usually larger companies, number one, and the number two, that they're inelastic. And I guess number three, that hedge funds are somehow the benefactor of those things. I don't know. How else to explain that? There's nothing under the hood that's necessarily sinister about it. They're easy to purchase. They're readily available to smaller investors so they've become more popular. Does it funnel money into larger sized companies because it's a quote unquote market cap related index? Yeah, sure it does. Does that cause bubbles in and of itself?

I'm not convinced that's true. I think that it's performance chasing on shiny objects, but I would include just things that have gone up a lot as people want more of them and there's a fear of missing out type of mentality and that's more likely to be the culprit of what a bubble ends up being. Do hedge funds take advantage of those things? Absolutely. That's the the design of them. They are less retail investor oriented, and they're going to arbitrage things like rebalancing dates inside of those indexes and try to buy our cell securities based on when those dates might transact. And certainly if they're going to cause a bubble, they would hedge some of those risks and maybe take the other side to it. Three things in the economic calendar for the day,

and then I'm going to let you go. First was initial jobless claims. We've seen these numbers trend lower. Obviously, that's a good thing, but we've got a 200,000 number versus 208, good for labor, second comment about on the economic side today was about Q3 GDP. This is a revision. So we were at 4.3 as the number before. This was revised up. So a little stronger GDP to 4.4. So we're two out of two as far as good. Third piece was headline and core PCE coming out in line at point two for the month. I would call that good normally, but since it's from November and delayed, I'm not all that excited about the number being relevant anymore here in January. Those are my comments for you today.

I appreciate you listening. As always, reach out with those questions. They're good ones, and we'll get back to you with answers. Hopefully they're good ones too. With that, have a good weekend, and I will talk to you soon. Thanks again 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

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