The Dividend Cafe - Thursday - May 14, 2026

Episode Date: May 14, 2026

On Thursday, May 14, Brian Szytel recaps a broad market gain (Dow +370, S&P 500 +0.7%, Nasdaq +0.9%) with the 10-year Treasury closing near 4.48% and argues the 4.50% level is not a meaningful “line in the sand,” noting rate pressure tied to oil above $100 amid Iran-deal uncertainty. He summarizes Trump’s two-day meeting with China’s President Xi as generally positive, with Xi raising Taiwan and Trump not engaging. Markets continue a “wall of worry” melt-up driven by an AI capex/productivity boom, while Q1 tax refunds ($202B vs. $179B last year) and about $100B in refunded tariffs (about one-third already returned) add stimulus, though both reflect timing of taxes extracted and refunded. Strong earnings compressed valuations (S&P ~22x to ~21x), with Middle East tensions and energy prices creating Q2 uncertainty and a moderate bull-bear ratio (~2.2:1). He addresses a question about sharing ideas on media, emphasizing TBG’s client relationship and evolving portfolio management as the core value. Economic notes: retail sales in line, jobless claims slightly higher but in line, and import/export prices higher with exports rising more. 00:00 Market Snapshot 00:25 Rates Oil And Geopolitics 01:48 AI Boom And Wall Of Worry 02:21 Refunds And Tariff Rebate Boost 03:45 Valuations Earnings And Sentiment 04:49 Sharing Ideas Versus Client Value 06:42 Economic Data And Sign Off 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. Good evening and welcome back into Dividend Cafe, Brian Sightel with you here. As always, on your Dividend Cafe midweek report here. It is Thursday, May the 14th. Look, we got an update across the board in markets and a decent update. We got the Dow up 370 points. SMP 500 was up 7 tenths of a percent. NASDAQ was up almost nine-tenths of a percent. Rates were pretty sanguine.

You had 10-year close at 448, so we're flirting with that 450 level. And just like everybody on the media has said, the 450 level is a magical number where the market doesn't like it anymore. I don't fully buy that. If you're getting higher rates marginally, so call it from 425 to 450, first off, that's not a big move. but because of demand and because of good things going on in the economy, I'm not sure that there's a line in the sand of a specific basis point.

That really makes a big deal. Rates are have moved up a little bit, and it's because oil is above 100 until we get through this around deal. You did see Trump visit China and President Xi. Obviously, today was the first day concluded of their two-day meeting. Generally, responses have been positive that it went pretty well. There certainly was some pushback from Xi on Taiwan, and a potential for a conflict if they disagreed on how that should be dealt with,

and Trump basically just didn't engage on the topic. But I do think that'll come up. And if that was a shot across the bow, so to speak, to test whether there's still resolve on Taiwan because of a small, not to make light of the human side of things, but the otherwise small issue that we're having in the Middle East from the standpoint of a military conflict, then I don't know how well that's going to fly. but I suppose anything can happen with this administration, so we'll have to just wait and see. The market itself, though, it continues to just climb this wall of worry.

We've talked about that quite a bit. It's fueled by a lot of things. The AI-capex boom and productivity and the real return on investment has been somewhat substantial and better than expected. So there's that. That will fuel itself so that it's working and so that there'll be companies that continue to do it. Just keep in mind there's only so much free cash flow and whether companies end up of tap in credit markets or at some point to keep the party going, we'll see. But as of now, it should be a positive feedback loop, and we're seeing that. The other thing I wanted to mention, though, is you

did see a lot of tax refunds coming in Q1. We get that every year. This is, this year was something like $202 billion. Last year was about $179. So it's 10% higher this year than last year. And that's in and of itself a lot more money coming back into the economy. But if you think about the amount of capital gain exposure that was increased because of rising markets and more capital activity, it's actually pretty phenomenal when you think about it because more money would have been paid with higher incomes and with more capital gain exposure and to see that stuff coming back. The advance expensing and things helps with income. But as far as capital gain, that's separate. That's my point. But all that to say, that's not coming to an end. Now, you do have a amount of money,

though, that's coming into the importers. If you remember the Supreme Court or returning the IEPA tariffs, and there's about $100 billion, believe it or not, that's going to get refunded. About a third of it has already happened, but in this quarter, that's another influx of capital back into the economy. Now, in both cases, the funny thing is, taxes were extracted from the economy and then refunded, and tariffs were taxes also extracted from the economy and then refunded. So it's just a little bit of a shell game there with timing, but nonetheless, that's happening, and that should be somewhat stimulative. So all of those things, considered into the economy, that's what's driving this meltup. The nice thing I will say, too,

is even with markets doing well, earnings did so much better that you actually had a compression in the multiple that I spoke about by about 5%. So S&P was at 22 times. Now it's about, call it 21-ish. So I'd say that is a somewhat positive underlying factor, just that there was some valuation discipline. And the reason is that we don't exactly know what is going to flow into Q2 earnings. with $100 oil and what has gone on in the Middle East, how that's going to affect things. And so there's this juxtaposition of these different cross currents, Middle East tension, higher energy prices, an amazing Q1 that had none of that stuff priced in. So how much does it get priced into Q2?

And that's actually keeping the bull somewhat a check. You've got a bull bear ratio that's about 2.2 to 1. Now that doesn't really mean anything. Let me paint the picture this way. It's about in the middle. So it's not overly hot and it's not overly cold somewhere right in the middle. So porridge is just right. Markets tend to like porridge is just right.

So that's where we have it. The question in there today I liked, I'll admit that I'm a human being and I suppose there's some ago there, but it was a mention of me on a video that I did on Bloomberg, but that isn't the reason I like the question. It's because it was thoughtful around us divulging our trade secrets or our IP on the mass media to everybody to know. Are we worried that's going to mean less people need to work with us? if they can just watch TV and get the information.

I appreciate the question framing. The reality is the value proposition of TBG really is about the client relationship. I know that can sound cliche, but I don't mean it to. It's the truth. That's what the value is. Of course, the dividend growth portfolio is a component of that, and we obsess over it, and we love it, and we're passionate about it, and we think it drives investment results that basically achieve almost all of our client's goals.

That's powerful for us. But at the end, I don't necessarily, mind if there's some stocks that we say on TV that we're passionate about. I don't even necessarily think it matters if we share the holdings because they're not going to know how we change the holdings and we changed one today and we changed one two days ago. I suppose sharing a recipe that is evolving can divulge a restaurant or a chef's trade secrets, but I just don't know if people at home can replicate the cooking the same way. So I don't know if that analogy rings with you or not. But my point is the value proposition is broader, number one, number two, we're on

going, so us sharing some things along the way shouldn't make too big of a difference. But more than that, I'd like to be able to speak our mind on TV and written formats, and whether it resonates with some people or it doesn't is not in my control, but we're passionate about certain topics. We like to speak about them. Do we get clients? Because we're passionate about certain topics that resonate with people, of course. But that's not the motivation and the reason as to why we're doing those things. So I hope that clears up the question and the thought around it for anybody else. If you have questions, just reach out to me and I will answer them. The three things real quick before I head out in the economic calendar were retail sales were in line.

Initial jobless claims were actually a little higher, but I'm going to call them in line. And then you had import prices that were higher for April, but technically export prices were even higher than that. So I'm going to chalk that up to somewhat positive. So we're charging a little bit more on what we're shipping out and paying a little less for what we're bringing in. That's my summary on those three things. With that, I'll let you go for this evening. If I don't speak to you, have a great weekend. Thank you.

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