The Dividend Cafe - Thursday - March 5, 2026

Episode Date: March 5, 2026

Brian Szytel recaps a volatile market day with a broad selloff: the Dow fell 784 points after being down over 1,100 intraday, while the S&P 500 and Nasdaq declined modestly, with tech relatively stronger on AI-related earnings. Despite headlines tied to Iran, he notes markets are only slightly down overall and still focused on positive economic fundamentals. He highlights supportive data: initial jobless claims met expectations at 213, import prices rose less than expected, and productivity surged to 2.8% versus 1.8% expected (with prior quarter revised higher), though labor costs also rose 2.8%. He discusses whether AI may be contributing to productivity gains but wants more quarters of evidence. Addressing questions about Iran and U.S. debt, he contrasts it with Afghanistan’s 20-year, $2T ground war, emphasizes oil risk via the Strait of Hormuz, and says dollar impact depends on unknowns. 00:00 Market Volatility Recap 01:05 Staying Invested Amid Geopolitics 01:21 Economic Data Three Signals 01:54 AI And Productivity Debate 03:16 Client Question War And Debt 03:37 Afghanistan Comparison Costs 04:19 Oil Shock And Dollar Impact 05:17 Closing Thoughts And Thanks 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 to Dividend Cafe. Brian Saitel is with you here on your Thursday afternoon in markets that were down. We had a rebound yesterday. Markets were positive and would one day give it, another day takeeth back. Today we had the Dow down 784 points. S&P was down half a percent, NASDAQ, down a quarter of a price. So it was a broad-based sell-off and you did have better performance in tech on the day. There was some AI-related names that posted good earnings. It boosted debt sector. But across-the-board sell-off in stocks, that said, we were down significantly off of the lows.

We were actually down over 1,100 a couple of hours ago on the Dow and closed down about 784. It is that 4, 350 points off the low. So meaningful move higher. And you know what? Honestly, since this thing began with Iran, we're down. one-third, probably less than that now that the recovery happened, but we're down about a third of a percent. So really, we're not down. So markets are volatile, but they're directionally haven't changed much because they're mostly paying attention to positive fundamentals on the economy.

As far as when this will subside, I wish I could tell you, I obviously don't know, but expect volatility, expect opportunities. I wouldn't get shaken and we move forward so long as your portfolio is aligned the way that it should be. And I'm certainly aware that it is, if you're year at the Bonson Group. We did have a pretty good economic backdrop on the day. Three things. One, initial jobless claims were right in line with expectations. We got 2.13. That's good. And the import price index was less than expected. That's also good. We got a 0.2 instead of 0.3. So too good. Let's see what the third door gives us. And we get U.S. productivity substantially beat estimates at 2.8% versus 1.8 expected.

and that's after last quarter, by the way, was revised significantly higher, 5.2 to 5.4. So good things there on productivity. And the question is what the productivity that AI has promised us actually showing up in real numbers now, because you have two quarters in a row. And that's great. My point, I guess, that I'll say here and did not write in the written, is that labor costs were also up about 2.8% in the quarter. Those two things can offset each other. But nonetheless, they're good numbers. on productivity. And if we look back to the 90s, for example, the internet took about five to six years or so to start showing up in numbers. The productivity gained. The benefit, as people got better computers and people got online and could communicate and look things up and use the internet for all the power that it is, took about that long. We're about halfway through that runway with

AI that said there could be a faster adoption rate. I would assume there would be going from not having a computer first off to having one, then to have one that could do more than just word processes process back in the 90s and used the internet. It's probably a longer runway than what AI is when you can just download an app instantaneously on your phone to get it. So I'll give it credit. It could be starting to flow into productivity. I sure hope it is. I know the companies that spent hundreds of billions of dollars on it certainly hope it is too, because that's good for everybody. And I'm encouraged on what I'm seeing in the productivity side. And I'm not quite convinced that's what it is. And I'd like to see another quarter or two before we can start talking about the gain that we're seeing out of it.

The question that we had in there today, I actually got a similar version of this twice in different conversations with clients and prospective clients. But it's essentially about the debt in the U.S. And this particular question was about the war in Iran. What if it turns out like Afghanistan, it lasts super long and costs a lot of money. Doesn't that add to the debt and hurt the dollar? Answer is, look, the war in Afghanistan was 20 years, cost $2 trillion, a little bit more. than that actually and most of that went to the debt. So that's not good. There's too many variables that I could have to guess of how this thing's going to play out by comparison, so I won't. But just

Afghanistan was a ground war. We had 100,000 troops there at the peak. It was costing us something like $300 million a day if you divide the total number of time by the amount. But this has been a five-day campaign. It's solely bombing. So no troops on the ground. I'd be surprised if the administration has a conviction level to make it last for 20 years. They won't be around that long themselves. Nonetheless, we don't want to have it spent out of control and last that long anyways, of course. When we're talking about Iran in the straight of hormones, we're talking about it a meaningful amount of global oil supply. And every $10 move higher in oil means shaving a 0.1% off of GDP and adding about 0.2% to CPI, if you think about that calculation. So that's not good. And that's the bigger factor, really, at this point.

because we only spent about $5 billion on it. Now, $5 billion is a lot of money to you and I, but it's certainly not to the government. I don't know how it's going to end, so I can't answer the question fully. Would it cost more than Afghanistan? If it was a similar amount of time, yes, no question about it. Things cost more, number one.

And then Iran has all of the military that's so much larger in the oil and on the whole thing. Do I think that it would add to the debt? Yes, I do. Do I think that would hurt the dollar? It just depends on what the other global currencies are doing and ultimately what the dollar amount and price tag is. So I can't really answer that exactly. I suspect the dollar would perform or would continue to perform fine against other major currencies, is my take on it.

But too many unknowns there. But nonetheless, that's what I have for you on the day. I appreciate you listening, as I always do. I appreciate your questions. And if you get into the weekend without hearing from me or speaking to me, I wish you a good one. And we'll talk soon. Thank you. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member Finra and SIPC,

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