The Dividend Cafe - Tuesday - January 28, 2025

Episode Date: January 28, 2025

Market Updates and Economic Insights - January 28 In this episode of Dividend Cafe, Brian Szytel reviews the market's recent performance, highlighting fluctuations in the Dow, NASDAQ, and S&P indices. He discusses the impact of a sell-off related to DeepSeek, economic indicators such as durable goods orders and the K Shiller 20 city home price index, and consumer confidence data. Brian also touches on potential Fed rate changes and market rotations from growth to value sectors. He concludes by encouraging viewers to reach out with questions, promising further insights in the next episode. 00:00 Introduction and Market Overview 00:59 Economic Indicators and Housing Market 02:14 Consumer Confidence and Upcoming Reports 02:58 Market Rotation and Sector Performance 03:25 Conclusion and Farewell 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 Tuesday, January the 28th. Brian Seitel with you here on generally a positive day. The Dow yesterday closed higher, of course, decently, 285 points, but the rest of the market was lower, including the NASDAQ, down over 3%. Today, a bit of a reversal, although all three of those indices were positive.

The Dow was up 136 points, S&P was up about a percent, and the NASDAQ was up 2%. So we got some recovery there from yesterday's mainly artificial intelligence sell-off related to a company called DeepSeek in China creating a more efficient potential solution in that realm. This is called the Jevons Paradox, which I'll write about tomorrow. Aside from that though, the day was flat. We closed at 4.53. As far as Fed futures are concerned, we've got about a 30% chance for an increase in March and

About a 50-50 for May being a point in which we will start decreasing interest rates on the economic front A couple of things we had durable goods orders for December that missed a little bit. They were down 2.2 percent We were expecting a half a point increase The K Schiller 20 City Home Price Index was in line, which is now a 4.3% year-over-year number. So things have definitely calmed down in home price appreciation, although have been quite resilient. Again, there's just a lot of equity there, but with rates where they are, the market remains fairly frozen. And so not a lot of transactions are occurring. There are more listings going on the market, though. And so, again, as interest rates move a little bit lower,

you could see things unfreeze a little. In that case, I think you get some price discovery and potentially lower prices. Although with the healthiness, I guess, of the housing market from a LTV standpoint, from an equity standpoint, and frankly from even the consumer side being fairly healthy or quite healthy, meaning the jobs market is good, the economy is growing, these things. I'm not sure that it would be a major decline in home prices, but time will tell.

In any case, I think having it unfreeze and having people be able to move around and have that industry work is obviously a good thing January consumer confidence today was slightly less than expected It was a 104 versus a 105 number that was consensus These things tend to be a more lagging indicators as we talk about often There but nonetheless consumer confidence still fairly high and healthy overall. Tomorrow we'll have some numbers on inventories and then some FOMC rate decision that'll basically say rates are staying on hold, but it'll potentially give us some insight into forward guidance on rates and

anything changed in the language, which is what the market participants will be paying attention to. With that, more talk on tariffs and what will come down the pike there and there's continued rotation in the markets. We've spoken about this for quite some time, but obviously yesterday was the doozy of that occurring with the biggest disparity between the two that I frankly can remember saying in a very long time. The breadth internally in markets has started to weaken, particularly in growth, and some

of the outperformance in sectors like staples, energy, healthcare, financials particularly are all reflective of further rotation from growth to value. With that, I'm going to let you go for the evening. I appreciate your questions. As always, please do reach out with them and I shall 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, 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 or sell securities. No investment process is free of risk. There is no guarantee that the investment process or investment opportunities referenced herein will be profitable. Past

performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute investment advice. The Bonser Group and Hightower shall not in any way be liable for claims and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information

referenced herein. The data and information provided as of the date referenced, such data and information are subject to change without notice. This document was created for informational purposes only. The opinions expressed are solely those of the Bonson Group and do not represent those of Hightower Advisors LLC or any of its affiliates. Hightower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on

the client's individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for any related questions.