The Dividend Cafe - Thursday - October 9, 2025

Episode Date: October 9, 2025

Market Update: Earnings Shifts Focus from Political Headlines In this episode of Dividend Cafe on Thursday, October 9th, Brian Szytel provides a market update. The DOW dropped by 243 points, the S&P fell by a quarter of a percent, while the Nasdaq remained mostly flat. The 10-year yield increased slightly by a basis point. The episode highlights the impact of delayed economic data due to the ongoing government shutdown. Brian discusses the encouraging shift in focus from political to earnings reports, with notable companies showing strong earnings. He emphasizes the importance of fundamental analysis and contextualizes current market performance by comparing it to historical rebounds. Brian also touches on the health of municipal pensions and the attractiveness of municipal bonds in high tax brackets. He concludes by encouraging listener questions and wishing them a good weekend. 00:00 Introduction and Market Overview 00:31 Economic Data and Government Shutdown 00:49 Earnings Reports and Market Fundamentals 02:02 Historical Market Context and Predictions 03:04 Focus on Cash Flows and Dividend Income 04:22 Municipal Bond Market Insights 05:46 Conclusion and Viewer Engagement 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 Thursday, October the 9th. Brian Saitel back with you here for your market update on a day that was overall down a little bit. We had the Dow down 243 points. S&P was down a quarter of a percent. Nasdaq was flat. It was down 18 points. which is barely moving. The tenure was up a basis point. We closed at 414. So all in all, fairly modest move on the day, a bit directionless. There's not a lot of news in the headline right now as far as economic numbers. We were expecting a few things out today on initial jobless claims and wholesale inventories. Those were both delayed. Government's now in its ninth day of being shut down. So some of this data is just on pause here, which isn't necessarily a negative thing.

my comment today was about earnings starting to come out. And it's a nice shift. So instead of seeing a political headline or a tariff headline or this or that or all of the things that we've been used to looking at, just to get focused back in on companies and how well they're doing, both the largest snack maker in the country. You probably know what that is. And also the oldest airline company in the country, both had really good earnings on the day. So both stocks were up, which was nice. But, you know, again, it's about shifting back to fundamentals, looking at what is more important, which is how companies are actually doing. Some of the other comments that I had were about earnings. So like I said, we're starting to hit some stride in Q3 earnings being reported. The estimates have been increased

from about an 8% growth rate to an 8.8% growth rate. So they're expected to be pretty good. And as we're getting into this, we've talked about valuations being high. And what we will see in earnings will be whether they can be supported. But as far as whether that means that this market is long in the tooth or that it's gone up too much or that it's set to go down. The answer is maybe yes and maybe no. And my comments are for some historical context, because there's a lot written about the strength of the rebound off of the April Liberation Day lows. We're up about 35%. That was after a 19% correction. And so if you look at historical periods of time, that's actually the fourth most robust move off of the bottom that we've had

in history. And the other moves were in years like 2009, 2011. in the 1982, those were meaningful bare markets, so not just a 15% more drawdown on the way down, but more than a 25, call it almost 30% plus. So the context isn't perfect, is my point. And I don't like to use historical context to say, because this happened in 1982 in 2009, that means absolutely that in 2006, this is exactly what the market's going to do. Because there's a certain humility and just understanding that markets are unpredictable. And oftentimes, the human condition is a fallible one and is fooled by what is otherwise a random outcome often with trying to explain the way the world turns. And my point to that is some of that reasoning and understanding

is why we focus on cash flows and why we focus on dividend income. It's because it's real and it's now. It's focusing on what is real and what is now and what can come into an account versus what may happen six months or 12 months from now in the share price because you just don't know, regardless of historical context and because of this or that, or it's Halloween's coming up or the Jets won or whatever predictor you want to come up with. I also say this too because we've now had three years in a row of double-digit returns on the S&P 500. That's a robust market return. It's nothing like the 90s were when I was basically graduating college at the end. But nonetheless, it's been a robust move here the last three years. But as they say,

say, bull markets don't end of old age. They get killed by the Fed. And my comment in a cutesy kind of way was, this bull market's only three years old, and the Fed isn't tightening right now. It's easing. So go figure, right? This bull market may last for a long time. The fact that we've had three positive years doesn't mean that we won't have three more. So that's what I have for you today. It's a comment more about trying to predict the future and what is known and unknowable. There was a question in there that was more granular. I spoke about the Muni market, municipal bond market a few weeks ago, someone reached out and asked me a question as to unfunded pension liabilities. And was I worried about that market because of those liabilities? And the answer is

yes and no, I want the liabilities to be fully funded, but that's not what we're saying. That said, on a relative basis to other time periods, they're actually more funded than they have been. So they're at about an 80% on average funded amount in those pension for municipalities across the country. That's actually a pretty decent number. The other reality, to those actuarial calculations of pensions, is that both interest rates and rates of return have gone up in those calculations and contribution amounts have also gone up.

Okay, so when they calculate on what is a funded amount, that's what's moving the needle there. But either way, when you look across the rest of the fixed income landscape, my comments on the municipal market were one, if you're in a high tax bracket, the taxable equivalent yield from those investments is very attractive,

historically and relative. And then also from a default perspective, from a credit quality and a default perspective, that it's a very safe investment on that in that front. You still have duration risk, meaning interest rates can change. But those were my comments about the muny market being attractive, inclusive of whatever pension liability you want to look at. All righty then. So that's what I had for you today on this market recap. I'm going to let you go for this evening. Please reach out with questions, as always. And if I don't speak to you, I hope you enjoy your weekend coming up. Thank you again. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered

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