The Dividend Cafe - Thursday - October 23, 2025

Episode Date: October 23, 2025

Market Updates and Global Economic Impacts - October 23rd In this episode of Dividend Cafe, Brian Szytel provides an update on market movements, including modest gains in the DOW, S&P, and NASDAQ. The episode discusses the impact of US sanctions on Russian oil companies and the EU's ban on LNG imports from Russia, aimed at limiting funding for Russia's war efforts in Ukraine. The volatility in the energy markets and a slight increase in US treasury yields are also covered. Additionally, Brian addresses concerns about China's selling of US treasuries, its gold purchases, and the implications for the dollar's value. The episode concludes with a brief mention of upcoming economic reports, particularly the CPI report and initial jobless claims. 00:00 Market Update: October 23rd 00:25 Impact of Sanctions on Russian Oil Companies 01:46 China's Financial Moves: Selling US Treasuries and Buying Gold 03:32 The Dollar's Stability and Global Currency Dynamics 04:59 Upcoming Economic Reports and Conclusion 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 back in to Dividend Cafe this Thursday, October the 23rd, Brian Saitel with you from our West Palm Beach, Florida office. On a modestly update here in markets, we had the Dow up a third of a percent. S&P ended up about six-tenths of a percent, and NASDAQ ended up about nine-tenths of a percent. percent. And that was off of what was earlier some volatility in the morning because the U.S. increased significantly so, some sanctions on two of the largest oil companies out of Russia in a demand of a ceasefire in Ukraine. And on top of that, you also had the EU ban LNG imports from Russia as well. So all of this stuff is really designed to cripple the funding mechanism

for Putin's war machine in Russia against Ukraine, and we had volatility in the energy markets pretty much across the board, although, like I said, stocks ended up closing higher on the day. You had Brent WTI, both up on the day. WTI was actually up a little over 5%. That said, and my comment on this is that that's a good move for oil, although it's a commodity and it's volatile, so it's not really all that much, frankly. The other thing is it's one thing when you've got oil starting in the mid-50s to be up 5%, than it is oil in the 70s or 60s or 80s, you know, a much higher level to be at 5%.

In other words, $61 WTI just frankly isn't all that much. So pretty muted overall in the energy landscape. But that sends some reverberations through the market. The yields were actually higher. We had the 10-year-up five basis points. We're now at four even on tens. So some volatility around energy markets largely with that news today on sanctions on these two large Russian oil companies.

there was a good question in there today about China's apparent selling of U.S. treasuries and buying gold and then apparently trying to convince the other Brickett nations to do the same thing, and that would cause dollar devaluation. And this is important to walk through because these headlines do catch people's intentions, and I totally get that. But just so understand that what we're talking about is China has divested about $500 billion of treasuries of the course of 12 years. so I call it $45 billion or so a month. I'd call that pretty measured. Also, it doesn't take a new account the fact that China holds U.S. Treasuries and EU banks and things, and that's harder for us to measure. The other thing, the third thing I would say, is also keep in mind that China has increased their exposure to government-backed securities like Fannie's and Freddie's,

so mortgage-backed securities. There's a higher and bigger spread to them for foreign investors where ultimately the same credit guarantee is backing a little higher interest rate on the payment. And what it does for them is it gives them the same dollar exposure as they were after with treasuries. So take that all with the grain of salt. The one thing I'll say, separate from that, is China has increased its position in gold as a central bank.

It's been buying, but that is irrespective of its holding up treasuries. And also remember that China needs to have a value of its currency regards to ours. And remember, it's a creditor nation, meaning it is, it runs an account surplus every year. It needs to put its dollars to earn interest, and it also needs to facilitate a stable currency. And all that comes into play with their exposure to treasuries. And then the other part I would also mention is just remember, on these large dollar amounts,

you know, the world has four major currencies in it. So when you think about different credits of where you're going to place money in interest rates, there isn't something in the near future where the dollar isn't something useful for that or will lose its reserve status or any of the like. The notion about dollar devaluation and the recent weakness, just keep in mind if you look at a chart, especially over 10 years, the dollar has oscillated about the exact same level the entire time. Sure, it's gone up and it's gone down, but it's basically been flat here for about six months. And then, of course, you've seen the move of gold with some of the essential bank buying come off and the price of gold has come down here a little bit. call it 5%. But I'll say the thing that will impact the dollar the most will always be our own internal policies. And just remember, stronger currency means our exports are more

expensive, a weaker currency means our exports are less expensive. And so if the goal is to sell more widgets, which this current administration wants to try to correct that trade imbalance, it's more in favor of weaker dollar policy in order to be able to do that. So those policies internally are more important than other central banks buying or selling our treasuries. And for what it's worth, all of the auctions that we've seen, particularly yesterday with a $20 billion auction, have gone off better than expected. And that's with less foreign demand. So there's just plenty of demand for these low credit risk assets for interest payments that are out there. And we're not saying anything in the horizon that is going to change that paradigm otherwise. There's more news coming out

tomorrow. The key point will be on the CPI report that we've been waiting for, but you'll also get at least some version of initial jobless claims out tomorrow as well. So those things can be useful. But the CPI number is going to be most heavily watched. But that's what I have for you today. I encourage your questions. Please reach out to them. If I don't hear from you, I wish you well, obviously, and have a great, great weekend. And we'll talk to you soon. Thank you for listening. The Bonson Group is a group of investment professionals registered with High Tower Securities LLC, member Finra and SIPC, and with High Tower Advisors, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC.

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