The Dividend Cafe - Tuesday - December 2, 2025

Episode Date: December 2, 2025

Market Recap and Insights: AI Competition, Private Credit Risks, and Consumer Sentiment In this episode of Dividend Cafe, Brian Szytel from West Palm Beach provides a market recap for Tuesday, December 2nd. He discusses recent stock market trends, including the Thanksgiving rally and subsequent fluctuations. Key points include the Fed's quiet period and high likelihood of a rate cut, Bitcoin's volatility, and upcoming economic data releases. Brian also examines consumer sentiment versus actual spending on Black Friday, and the fierce competition between major AI platforms like ChatGPT and Google Gemini. Moreover, he addresses the risks and misconceptions associated with private credit investments, explaining their higher yields and inherent risks compared to traditional fixed-income assets. 00:00 Introduction and Market Recap 00:13 Thanksgiving Week Market Performance 00:43 Current Market Movements and Fed Updates 01:12 Economic Data and Consumer Sentiment 02:05 Artificial Intelligence in the Market 03:29 Private Credit: Risks and Rewards 06:04 Conclusion and Final Thoughts 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 in to Dividend Cafe in today's daily recap. This is Tuesday, December the 2nd, Brian Saitel with you here from our West Palm Beach, Florida office on a sunny, beautiful afternoon. On an update, we had last week during Thanksgiving five up days in a row. one of the best Thanksgiving weeks that I can remember. And then we gave some back on Monday. And then today I've resumed a little move higher here in markets. The Dow was up 185 points on the day. S&P 500 was up about a quarter of a percent. Nasdaq was up a little less than six-tenths of a percent. So across the board on stocks, rates were pretty flat on the day. We closed at 409 on the 10-year, which was basically flat. Talking of rates, we're in this quiet period for the Fed here as they

go into their meeting here. So not a lot of news on the Fed front for now, but the percentage chance on Fed futures for a rate cut have moved all the way back up to 87%. It looks like that's going to be an assurity at this point after they get through with their meeting. As far as what moved on the day, I guess I could say that Bitcoin was up six and a half percent, but then I'd also have to say that Bitcoin was down 7 percent yesterday for what that is worth. Not a lot of economic news out on the calendar. We'll end up getting an ISM services number tomorrow and also an ADB private payroll for November. So those are going to be fresh reads. Remember, the data has been delayed because of the government shutdown, but we're starting to actually get fresh

numbers coming out, and that should more or less start to happen tomorrow, which I think will be good. Another point I thought was interesting was aside from a lot of the consumer sentiment news that you've read that has been negative recently, again, I'll chalk it up to some of it being around this government shutdown, but consumer sentiment is looked at as being somewhat negative and soft. But then the hard data, which is the second largest credit card processing company in the country, reported a significant boost in spending on Black Friday from last year. So if people are feeling gloomy, they're not acting that way on the day in which shopping sales come online and they're spending as more than they ever have. We talk a little bit today about artificial

intelligence and it isn't to say that it won't be successful and transformative. What it is to say is it just won't be monolithic across every single company and every single sector within it that is associated with AI because today you saw a stiff competition between two of the largest, which is chat GBT and Google. Their apparent companies, the former issued what was a code red, claiming that the latter was taking a significant amount of market share. And of course, these businesses compete against each other. They compete against for active users on the platforms, their AI platforms. And while ChatGPT has 800 plus million daily active users, which is an astonishing number if you think about it, Google now has its 650 with its Gemini AI tool. And so as

these different businesses compete, and as these different businesses need a form of AI investment, it's just hard to really imagine that there won't be some winners and some losers really just because of mathematics. When you think about the amount of CAPX that has gone into this space and it's fueling a rise and all of them equally across the board,

I don't think that is sustainable. So yes, I think there will be winners and I think there'll be losers regardless of if AI ends up being as transformative if everyone thinks that it is. So take that for what it is. There was a question in there today

about private credit. This is a very popular topic for whatever reason. There were two bankruptcies in the year that caught headlines, and it just seems like people are really interested on this topic and fear of it. And that's fine. I think that anything that has grown the way that it has, call it 10x and 10 years, deserve some scrutiny and some different ways to look at it. But the question is, with the underlying risk of private credit being so much higher, is it really worth it to just get a few more points of interest out of it or

yield. And shouldn't the debt portion of the portfolio be considered the safest and most liquid? Why put it in something that is considered not safe and not liquid for a couple extra interest points? So the answer is this. It really shouldn't be considered liquid or safe. Private credit is neither of those things. It's an alternative asset class. So this isn't something tied to stocks. It's not something tied to bonds. It's something that is going to be different than those things and not correlated to those things. It also comes with risk. We haven't gone through a large default cycle, really since the great financial crisis. And if you looked at private credit during that period of time, while it was an infant in size compared to what it is now, you of course had widespread defaults

because you had a deep recession, you had a credit freeze, and it was a difficult environment. So those secured loans suffered during that period of time. But there was recovery. And of course, that is why there's a double-digit yield associated with it is because it has higher risk. and there can be moments in which it gets tested. That metal gets tested. It's frankly been somewhat rare. The GFC was one of those periods, but that's the deal. It should not be considered just because it has a fixed yield or income as safe because it is not. It has risk. And it should not be considered that pool of assets to begin with. So, of course, with the higher risk and with the higher yield comes the potential for a higher return premium. And of course, that's because of that higher risk. So it's all a circle and it's all related to one another. But categorically, I would just define it differently than what the question is, although it's still a good question. And frankly, that's the way that we're looking at it because that's the truth. But I can't say that if that's the way that everybody is painting the private credit picture. If there are people touting that you get 10% and it's just like a

fixed income bucket like a bond, then I think they're in the wrong business. And hopefully that isn't the case, but that would be malpractice. But nonetheless, it's such a popular topic. We wanted to touch on it a little bit today. If there's any questions on private credit or any of the issues or media headlines about it, please let us know. It's a space we know a lot about, and we operate in on a day-to-day basis. There you have it for today. I'm going to let you go here.

It's later in the evening, East Coast. But I wish you well, and I hope that you have a good night. And please reach out with your questions. We'll talk to you soon. Thank you very much. The Bonson Group is a group of investment professionals registered with Hightower Security's LLC, member FINRA and SIPC with Hightower Advisors LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities LLC.

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