The Dividend Cafe - Tuesday - August 18, 2026

Episode Date: August 18, 2026

Brian Szytel recaps a modest down day in markets with the Dow down 116 points, S&P 500 down 0.7%, and Nasdaq down 1.3%, noting S&P advancers outnumbered decliners and equal-weight outperformed cap-weighted in a rotation toward value; the 10-year Treasury closed near 4.71%. Economic data was mixed: pending home sales fell 2.3% versus an expected 0.6% gain, housing starts missed at 1.2 million versus 1.3 million expected, import prices fell 0.4% versus an expected 0.1% rise, and industrial production came in at 0.2% versus 0.4% expected. He argues media “doomsdayism” about higher long-end yields overlooks longer-term context, with 30-year yields around 5.3% being normal historically, while acknowledging deficit and debt risks and linking higher growth to higher yields. He also cautions that CEO insider buying is only one data point and not a standalone investment thesis, emphasizing bottom-up fundamental analysis. 00:00 Market Wrap Intro 01:04 Housing Data Misses 01:41 Inflation and Production 02:12 Bond Yields Perspective 02:49 Debt Fears and Growth 04:21 Insider Buying Reality 05:11 Fundamentals Over Tips 05:26 Closing 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. Welcome to Dividend Cafe. This is Brian Saitel with you this evening here at a down day overall in markets, although modestly and off of the lows on the day. There was a few different pieces of news out in the economic calendar, and then I have some perspective on the rise in bond yields because it's one of the most, talked about media stories right now, and it's getting a lot of attention, and there's some doomsdayism going on with it. And I wanted to put some of these things into perspective and give you just a little longer-term way to look at things. The Dow was down 116 points. S&P 500 was down 7 tenths. Nasdaq was down 1.3%. So bigger skew towards tech. Technically, advances outnumbered decliners on the S&P 500, and then the equal weight outperforms.

the cap-weighted version. So another one of these rotation days into value. Ten year was down one, two basis points. We closed at 4.71 percent. So I'll go through the economic calendar first. We had pending home sales miss in a big way. They were declining by 2.3 percent for the month of July. We were expecting the gain of 0.6. Same story with housing. It just continues to be this sort of stuck part of the market and the economy. Housing starts for July were also lower than expected. by about 100,000. We got a 1.2 million. We were thinking it would be 1.3. So two bad numbers in housing. That's just the same old story. That actually does dovetail into my comments on interest rates on the long end of the curve with mortgage rates. But I'll leave that aside here for just a moment. If we look at import prices for

July, good news here, they were actually down more than expected. We got a negative 0.4% for the month and a gain of 0.1% was expected. So import prices coming down that ultimately will feel. fuel into a disinflationary narrative that I've spoken about a bit. On the industrial production number, it was just a bit under expectations. We got a point two instead of a point four. So kind of a mixed bag, I would say negative on housing, good on inflation, and then negative on industrial production. Let's talk about bond yield. So Bloomberg had a chart in there with the U.S., the UK, France, and Japan. And the point of the chart was to show how much yields have risen on the long end of the curve. And while that's definitely true, yields have risen. What the chart is really showing you

the last five years, and that's post-coming off of zero interest rates and post-COVID. And when you look at a longer period of time, and I just happen to choose 48 years since that's about how long I've been on the earth, you can really take a longer-term perspective and see that rates have risen, but from 0% up to where normal levels are. We're at 5.3% on a 30-year treasury. And I get it. There's deficits, and there's a big debt load that's being financed and potentially a bond vigilantes that are going to come and cause higher interest rates and demand lower bond prices and higher yields to finance all that debt. That's a real risk and some of that is happening. But keep in mind, too, growth has picked up a lot. Higher growth, indicative of higher yields. So all of this stuff is

tethered together. I do think what you have now with the Fed taking more of a backseat narrative and letting markets tighten themselves and act normally versus the Fed trying to manipulate the yield curve is a very positive thing. And you're seeing that across the curve. And when you see those two charts together, you can see that rates have risen from the lows, sure, but 5.3%. What are we really talking about here? In my entire life, rates have been higher than that 90% of the time. We're just talking about recently on the long end of the curve. So I wanted to give that context. We're still able to finance debts, things are still going fine. Because keep in mind, through all of those periods of time, call it the 80s and the 90s and even in the early odds, it's not like the economy didn't

have good and bad times. Of course, it did. There was recessions. There was bull markets. There was bear markets. There was wars. There was all of the normal things that are going to happen throughout human history. But my point is just positive things happen. GDP in the United States went from $2 trillion on the month that was born in October of 77 to $32 trillion now. So the doomsday stuff with interest rates going into the sky because no one's buying our treasuries is a little bit outlandish for me to buy into. There was a question in there today about when CEOs buy their own stock, is that a positive thing? And the context of the question was a newsletter that was touting if you buy the service, they'll give you the hot stocks where the CEO is insider buying and that's a super

positive thing. Is it positive? Sure. It's one data point out of about 100. CEOs buy their own stock for a lot of different reasons. Yes, that could mean that they have a lot of great information and that they believe in the company that they manage. And I think they should be buying the stock. But is that something to base an entire investment thesis around or is that some hot stock tip? Absolutely not. And remember, CEOs are people too. They have to manage their own personal goals and balance sheets and financial needs and all these kind of things. There's different reasons for insiders to both buy and sell. It doesn't necessarily mean there's some secret to it as far as where the shares are going to go from there. Always and forever.

the best way to look at individual companies is to look at a bottom-up basis and look at the fundamentals, make your own assessment of whether the future projections of those future cash flows will be worth more, and there's a multiple that is a reasonable price to pay for them. Okay, I'm going to let you go for this evening, as you might be able to tell. I'm a little bit under the weather, so I'm going to keep today a little bit short. But I appreciate you listening, as always. I'll be back with you tomorrow on the Dividend Cafe. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC with Hightower Advisors, LLC, a registered investment advisor with the SEC.

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