The Dividend Cafe - Thursday - July 23, 2026

Episode Date: July 23, 2026

In this Dividend Cafe Thursday episode, Brian Szytel recaps a broad market selloff with stocks and bonds down as the Dow fell nearly 600 points, the S&P 500 dropped 1.5%, and the Nasdaq slid 2.4% while the 10-year yield rose about four basis points to 4.7%. He attributes pressure to escalating Middle East tensions after a Houthi attack in the Red Sea, driving oil sharply higher (WTI up 6% near $92 and Brent up 7% above $100), and to disappointing earnings from bellwether tech names Google and Tesla, with Google showing negative free cash flow amid heavy CapEx. He notes markets are only about 4% off highs, cautions that volatility is normal, questions the usefulness of the Shiller CAPE given decades of “overvaluation,” and highlights very strong weekly jobless claims (187, lowest since 1969), which could raise the odds of a Fed hike. 00:00 Market Wrap Overview 00:52 Oil Shock and Rates Rise 01:27 Earnings Hit Tech Leaders 02:49 Volatility and Drawdown Reality 03:36 Shiller CAPE Debate 04:06 Jobs Data and Fed Outlook 04:54 Sign Off and Disclosures 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 Brian Saitel with you this evening here on Thursday, July the 23rd, on a pretty down day overall in markets across the board, actually. Both stocks and bonds sold off significantly. Dow was down, almost 600 points, S&P was down, one and a half percent, NASDAQ was down. Nasdaq was down. 2.4%. So it was more skewed heavily towards technology names, but everything was down in unison. And also you had the bond market sell off a little bit too, because yields rose on the 10-year, about four basis points. We closed at 4.7. So if you can remember that range drifting higher from the 450s, we're now into the 470s. The reason is that you had a Houthi attack in the Red Sea on some Saudi Arabian oil tankers. And so there's an escalation happening in Middle East tensions. And

that's causing oil to go up, it's causing interest rates to go up, it's causing stocks to go down. On the day, you had WTI up 6%, close right around 92, and you actually had Brent hit triple digits, up 7%, just over 100. And so these things are starting to matter. Both oil prices being too high and also the rise in interest rates is what's causing risk assets to come off. That all said, the other part to this story was really just about fundamentals, which is earnings. had two big bellwether technology names in Google and Tesla come out today and disappoint. Google had negative free cash flow behind a whopping 45 billion of CAPX and plans to spend $200 billion plus as such this year alone. And the hardest pill to swallow here is you've got

these basically market darlings of two big bellwethers both disappoint because they really can't just continue to spend on CAPX without having cash flows. that are productive be associated with it. And so the market is now paying attention, and that's something different. Previously, it was just the mention of CAPX and AI was a good thing, and it was money being spent, but then it was also cause for the stock to go higher.

And now show me the money, so to speak, with what needs to happen with some of these names. So if you think that is tough, just remember, there's going to be a lot of weaker players that technically aren't the market darlings that are going to have the same issue, and markets are not going to pay them, any favors. Those stocks are going to be hurt even more, in other words. So keep that in mind. But you do

have these tensions coming back up in Middle East. That's causing market angst. It's causing the VIX, the volatility index to go higher. And then, of course, stocks to go lower. That's all the negative stuff on the day. And what I will say to that is you also, for the most part, have markets that are off just about 4% or so from the highs. This isn't like markets have sold off very much. And My belief is that people have become a little complacent with how well markets have done. And so getting to a 10% or a 20% drawdown is going to feel worse, I think, than it would have in other periods of time. People simply have gotten unused to market volatility when actually it's the norm. Market average drawdowns are about 14% annually going back 50 years.

Just keep that in mind with how this will be reacted to here a little bit. It is just one day. Markets are still actually performing really well. to date and are all positive. Nonetheless, this is hitting home a little bit. Question in there today was about the Schiller-Cape ratio and is that a good valuation metric. The reality is it's been overvalued for 30 years. So at some point, our comment is if something is screaming overvalued for a generation, at some point, does the baseline need to be readjusted? Is it antiquated? In other words, like how useful is a metric that says everything's expensive all the time for someone's entire life

that's not very useful. So that's my take on that particular metric. The last thing I'll talk about a little bit today was on the labor market. We actually had really positive employment numbers on the weekly claims. Remember, weekly claims can be more volatile. But nonetheless, you had a 187 print when we were expecting 208. And put it in perspective, 187 initial jobless claims is the lowest number since 1969. If you remember that year, we landed on the moon. Economy was pretty good after World War II. and the 50s and baby boom and all that. So that's a strong sign for employment and labor and that's a good thing. And if you think about rising oil prices, rising interest rates and labor that's hyper

strong, I'm just going to say it does put more odds of a fit rate hike sooner than later on the table. So these things are ongoing and they're shifting. But that's my update for you today. I appreciate you listening as I always do. And if I don't speak to you, have a wonderful weekend. and if you think of something that we didn't address or you'd like more clarity on, reach out, email me with the question.

I'd always like to get them. With that, I'll let you go. Have a good evening. 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 investment advisor with the SEC. Securities are offered through High Tower Securities LLC.

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