The Dividend Cafe - Tuesday - December 16, 2025

Episode Date: December 16, 2025

Market Movements, Economic Indicators, and AI vs Dot-Com Era Analysis In this episode of Dividend Cafe, host Brian Szytel provides a daily market recap for Tuesday, December 16th, detailing a mixed day with NASDAQ slightly positive, and declines in DOW and S&P indices. He discusses the impact of new economic data including better-than-expected non-farm payrolls and a rise in unemployment rates from 4.4% to 4.6%. Szytel also covers flash readings on services and manufacturing PMI which were below consensus. Additionally, he compares the dot-com era of the 90s with today's AI paradigm, highlighting the ongoing capital expenditure needs for AI technologies. Lastly, he addresses a Q&A about potentially creating a financial terminology booklet to help demystify investment jargon. 00:00 Introduction and Market Overview 00:41 Economic Data Breakdown 03:13 Comparing Dot-Com Era to AI Boom 05:36 Q&A Session and Final Thoughts 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. Good evening and welcome in to Dividend Cafe. This is Tuesday, December the 16th. Brian Saitel is with you here today for your daily recap on a mixed day overall at markets. The NASDAQ was slightly positive. Dow was down two-thirds of a percent. S&P was down a quarter. of a percent. Across the stock market and the different indices, a lot of it was to do with some varying different economic numbers that we got on the day. I'll go through each of them. Bonds actually rallied a little bit, and again, it was attributable to some of the economic data that I'll mention, but the tenure was down three bases points that we closed at 4.15. We've been hovering in this 415 level now for quite some time. But let's go through the economic stuff first, because I think there's a lot to go through, and then we can talk a little bit about some

correlations between what David is in the written version between dot com era of the 90s and then today's AI paradigm and then of course the Q&A session but so here's what happened today we got non-form payrolls that actually beat on the day we were expecting 50,000 new jobs we actually got 64,000 that's for the month of November remember government shutdown delayed a lot of stuff but the data is now fresh so we're getting real numbers so that's good we got more jobs created in the month of November the second piece though is the actual unemployment rate itself in the report, there's a lot of different factors that go into this actually ticked up two-tenths of a percent. So more than expected, we got from 4.4% unemployment in the United

States to now 4.6%. This is actually the highest going back to September of 2021. So the highest in about four years and is something that the Fed pays super close attention to. Again, they're weighing their two mandates. They have got to keep rates high enough to avoid inflation and they've got to keep rates low enough to not necessarily spur employment, but to keep a level. And right now unemployment is ticking up a decent amount. So if you think about September of 2021, that was only about what was that a year, maybe 16 months since the peak of COVID. So that's a long way back from where we were all the way back up to that level. And I don't know that it's enough to really move the needle a ton on what they were planning to do already for January. But what it did do is move

the futures a bit for that time from about 22% odds to 28%. So you can see what markets are thinking about it, and those two pieces of information where the main movers of why interest rates came down a little bit and stocks were mixed on the day. There was two advanced readings, which are flash readings on both services PMI and then manufacturing PMI, both of which were below consensus as well. So you had the services PMI come out at 52.9 for the month of December. This is a very fresh read. There was a 54 number expected.

Remember, anything above 50 on these calculations. in PMI is considered expansionary, so those numbers while they missed are actually okay as far as what it means in the broader implication. The Flash Manufacturing PMI, this has been weak for years, frankly, came out actually a little below forecast at 51.8. There's 1-2-3-4, probably five different pieces of economic data that were out on the day, did lead to the third trade decline in the SMU-500, and the interest rate's pulling back here a little bit. So let's talk a little bit about dot com versus AI. So back in the day, and I remember it all too well, you had AI companies that were essentially websites that were promising different services and different products

and deliveries and all these new things, many of whom actually went to zero. And then many of them that went to zero, the ideas themselves, the thesis that was behind it, was wildly successful, but it was just done in different companies and in different ways than how those businesses were thought to have worked out. But the core of it all, it was website driven and there was a big scalable benefit to a lot of those technologies and how they worked. So there wasn't as much capital expenditure needed back then. Again, it was essentially you had a website, you had the good idea, and then the scale of those things was really considered to be quite exciting. And that's what led to the stock market gains back then. What ended up being realized is, okay, look, you actually

do need to spend money in order to deliver food to people's doorsteps. I call it web van back then, if you remember that, or like Pets.com. Those things exist, but where do you get that stuff? Amazon, so it already had scale to be the largest retailer and added some of these other consumable products in the pet food space and then also in the grocery sector for all of us. The difference now is you've got AI, and I think what people are underestimating is the amount of CAPEX that is needed to fuel it in, it's ongoing. The nice thing is that it isn't just an infinity sign next to what revenues may come.

A lot of those revenues are actually being booked, and it's pretty exciting. You have hyperscalers buying things, call it from chipmakers like Nvidia, and that's leading into real cash flows. The problem is that the ongoing CAPX is so intensive. There needs to be an actual underlying revenue stream and productivity gain associated with it for it to keep going, keep that engine going. Otherwise, it's going to run out of gas and it'll run out of oil, and the wheels will screech to a stop.

So difference in some of the pragmatics between the 90s web and today in the AI space, but some of those themes are similar, which is the business model themselves to produce really high levels of free cash flow over an extended period of time are just unproven. So I suspect that some will go to zero and then some will, of course, be successful just like the dot-com era. There you have it on some takeaways on that front. The question today was about a lingo booklet. So we use a lot of terms, terminology, acronyms to try to talk about financial markets. When we talk about these things internally in the investment committee meetings, of course,

we just let them fly because we all understand exactly what they mean and it's more efficient to describe things properly. But when you're speaking to everyone else who isn't in the financial business or deals with it as we do, we need to unpack things a little bit. And so this question is a good one. It's a good idea. We should have some definitions. I'm not sure that it'll be something to necessarily evergreen that people will keep in reference.

That would be my hope, of course. But nonetheless, it should exist and we want to put it together. So A, agree, B, we'll make it. And C, we'll try to get this in Q1 and the ball is on our court. So thanks for the question. So that's what I have for you today, economic side, market side, and some Q&A side. I'll let you go here this Tuesday. I appreciate you listening, as I always do.

Reach out with your questions. Have a lovely evening, and I'll be back with you tomorrow on Dividend Cafe. Thank you. 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 investment advisor with the SEC. Securities are offered through Hightower Securities LLC. Advisory services are offered through Hightower Advisors, LLC. This is not an offer to buy ourselves securities.

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