The Dividend Cafe - Tuesday - July 7, 2026

Episode Date: July 7, 2026

Brian Szytel recaps a quiet Tuesday, July 7, with markets closing modestly lower amid increased U.S.–Iran tensions involving tanker attacks and restrictions on Iran’s oil exports; crude rose about 3% to roughly $70.56 while gold dipped. Tech led the decline as semiconductors sold off, with the S&P 500 down ~0.5%, the Dow ~0.4%, and the Nasdaq down a little over 1%. Economic news was limited, but May’s U.S. trade deficit widened to $77B, about $20B more than the prior month. Despite the pullback, major indices are up around 10% year-to-date, reflecting a rotation from concentrated chip leaders (some down ~30% in 10 days) into defensives and broader participation. The 10-year yield rose ~7 bps to 4.55%. He also addresses concerns about Q1 profits boosted by mark-to-market gains on non-listed AI holdings, calling it non-recurring and two-sided. 00:00 Market Wrap Intro 00:11 Geopolitics Oil Moves 00:43 Tech Rotation Selloff 01:09 Trade Deficit Update 01:32 Year To Date Perspective 02:28 Rates And Macro Mix 02:39 Ask TBG Earnings Quirk 03:45 Closing Remarks 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 back to Dividend Cafe. This is Brian Saitel, your host this evening here on Tuesday, July the 7th. In a pretty quiet overall day in markets, really, the market ended up closing lower on the day. And some of that was because of some increase in geopolitical tensions with the U.S. and Iran. There was some attacks on tankers, and then the U.S. revoked Iran's ability to export and sell oil. And so there's some ongoing back and forth, and that's not necessarily new news, but just more of the same. Oil has become somewhat desensitized to that. Crude was up today, but it was only up about 3%. We're now at about $70.56 a barrel on crude. Gold was down a little bit on the day,

and really it was the resuming of this rotation trade that we've spoken about quite a bit. Chip stocks, semiconductors were down today, meaningfully on the day. S&P ended up closing lower by about 50 basis points. Dow itself was down by about 40 basis points on the day. Nasdaq was down a little over a percent. So you could see it was a much bigger, broader sell-off in technology stocks. But from the economic side of things, it wasn't a lot of news out. There was a number out for the May U.S. trade deficit that widened pretty significantly, about 20 billion. from the month prior. We printed a 77 billion trade deficit for the month of May, wider than expected and wider than the month prior. So that's really most of what went on in the

market. What we've been reiterating is that the market is not down on the year. The market is actually performing quite good. The S&P is up about 9.5% on the year. That's not necessarily a bad market. But what is happening is inside of that, you've just got a bigger disparity. Some of these chip names, and you can pick a handful of the biggest ones are down 30% and just the past 10 days. So it's a pretty big unwind there. And then some of them more staples, some of the more defensives are just simply performing a little bit better. And what's happening is the other 493 of the S&P 500 is just broadening out. And so you've got now the Dow up about the same exactly as the S&P.

It's actually up a little bit more on the air. And it's also all about the same as the NASDAQ. All of those three indices are now up roughly 10%. on the year. At one point, NASDAQ was outperforming by 700 basis points. So anyways, that's continued rotation in the markets and what's continuing to unfold. On the day, interest rates weren't largely changed, but we did have the 10 year up. About seven basis points, we closed at 455 on the 10 year. So a little bit higher oil prices, a little bit higher interest rates, and then of course you get stocks that sold off here a little bit. So the question that came in today and asked TBG was about the fact

that 12% of Q1, S&P 500 profits, were literally attributable to publicly traded companies mark-to-market valuing some of their holdings of non-listed AI companies, and that increased their earnings. And the question was, what do we think about that? Here's the reality. You've got gap and non-gap earnings and ways to account for those things. And as long as the analyst team that you are working with is not being lazy, can understand some of those nuances, it's not that meaningful too.

us, do I think $60 billion of additional earnings in the S&P 500 in the quarter, attributable just to just marking up balances of illiquid assets on a balance sheet? Yeah, I think it's a little silly, but hopefully those that are out there can understand that isn't something that is going to happen in perpetuity, and then it also cuts both ways. When those things devalue, it's going to end up hurting the other way, too. So that's our comment in there for STBG, and with that, I shall let you go for this evening. Thank you for listening. to the Dividend Cafe. The Bonson Group is a group of investment professionals registered with High Tower Securities

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