The Dividend Cafe - Tuesday - June 23, 2026

Episode Date: June 23, 2026

Brian Szytel recaps a broad market sell-off led by technology and semiconductors, highlighting a nearly 10% drop in South Korea’s KOSPI—an index heavily concentrated in Samsung and SK Hynix—attributed to valuation, demand shifts, and DRAM supply issues after a major run-up. He notes similar 5–10% declines in high-flying semiconductor names and emphasizes that despite real AI-driven demand and a rare reversal of decades-long chip price declines due to supply-demand imbalance, valuations still matter. On the economic front, flash PMIs were strong: manufacturing surged to 55.7, the highest in a little over four years, and services also beat expectations, supporting an improving growth backdrop tied partly to data-center CapEx. He addresses concerns about the U.S. dollar losing reserve status, arguing no viable replacement exists, citing dollar dominance in FX (90%) and global reserves (57%) versus the euro (20%). 00:00 Summer Market Check-In 00:31 Global Tech Sell-Off 01:38 Semis Valuation Reality 02:01 AI Chip Demand Shift 02:48 PMI Data Highlights 03:43 Dollar Reserve Status Fears 04:32 What Could Replace Dollar 05:53 Reserve Currency Numbers 06:32 Wrap Up and Q&A 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 Sightel, your host here today on Tuesday, June the 23rd, on a bright summer, sunny day. And I hope everyone is enjoying your kickoff and start to your summer. I just drop my kids off at their summer camps, so enjoying a little more freedom and a little bit more time to read. about the markets, and I'll go through that with you here today because we had a sell-off, and it was really broad-based across technology, and largely in the semiconductor arena, and there's a lot of reasons for that. Overnight, in Asia, the Kaspi, which is the South Korean Index, which is the number one global performing index on the year, was down just under 10%, right at 10%, 9.99% on the day.

It's a huge sell-off. Why? If you think the SMP 500 is concentrated, because it is, if you look at the Kaspi, 45% of that index is literally two stocks. It's Samsung and a semiconductor company called SK Hynix. Those two stocks were down big time, and the story really is just about valuation and some shift within demand and some supply issues with DRAM with those companies. But really, it's just about the tripling of them over the past 12 months, not just the two stocks, but the actual index itself. And so as they say, what goes up must come down.

you know, trees don't grow into the sky, all the different things that you want to come up with. But basically, you just had some froth coming out of all the momentum stuff in the market. And that was then triggering across the globe. And so our markets actually opened up lower. Futures were down already. But we traded lower for most of the day throughout. And same thing. Some of the semis that have really just rallied the most on the year have all come off big numbers, five to 10 percent on the day.

And again, it's valuation. We talk about this all the time. I know it's exciting and I know these companies have a lot of demand. That's true, but that doesn't mean that they avoid the gravitational pull of just when companies get too large and too expensive. So keep that in mind. The one thing I did want to say, though, is it's not without reason. The shift and the demand side for these chips, for AI, for the buildout of all of this,

is something that we've never seen before. If you're familiar with something since the 90s, most technology, if you look at chips, they've not only gotten faster, but they've gotten smaller. and also they've gotten cheaper over time. And you've actually seen that starting to reverse here a little bit, just because the supply demand imbalance is such, where you're actually seeing a dramatic increase in pricing for the first time in the 30 years. So there's a lot of funny things going on because of this.

And so that run up and price isn't just made up out of thin air. It's because of those dynamics. They're real. But again, just like I said, it's not one directional. And so have you got a big sell-off on the day? That was basically it on the day. there were a couple of things out in the economic calendar. Actually, I'll call them meaningful.

These are flash numbers, meaning preliminary on PMIs. Manufacturing was far better than expected. We got a 55.7. That's the highest number that we've had in almost a little over four years. So if you think about coming out of COVID and manufacturing going from stopped to turning back on and the big ramp up in those numbers, you're starting to see that here again. That's very good news for the economy. Manufacturing has been weak last couple of years and it's starting to turn back on.

And part of it is related to this big CAPEX story that we're talking about with the buildout of data centers and infrastructure and all the like. So good numbers on the flash manufacturing PMI and then you had flash services PMI that also beat slightly on the day. So I'll call both of those two out of two for good. And then you got the semi weirdness and some volatility around things. But that's my around the horn free on the market. The question that came in was one that we get often, but a good one, and I understand where it comes from. There's a lot of things written out there about the dollar and the reserve currency status. And this gentleman was asking about something he had read with it losing its reserve status over the next two to three years.

I have a feeling I know what the content was aimed towards, and my guess is that it was aimed towards signing up for a subscription or some other service or something related to whatever the fear mongering was for. I don't want to go overboard in that, but sometimes when you have just pretty sensationalistic comments like something bad is going to happen in the next one to two years or three years, I'm always a little skeptical. So that's my first disclosure on how I look at those things. But this question was still a good one. So will the dollar lose its reserve status? Here's the reality. There needs to be something to replace it. And unless you think we're going to go to buying things with crisp high fives to one another, there really isn't another global currency that competes.

You've got the euro, which is the next closest thing, and it has a hyper disjointed and strange fiscal state with different countries, and it has weaker economics and weaker demographics and declining populations. It's hard to really say the taxing authority of Europe is more powerful or a better, more transparent liquid mechanism than the U.S. dollar is it's really just not. The euro, by the way, makes up about 20% of total bank reserves in the world. So there's one. Second, let's look at China. Okay, Renminbi just is ruled out immediately because it's communist country and they have capital controls, meaning they don't let the money leave. So you could put the money in, but then it's going to get stuck there and that by definition doesn't make for a reserve status for the rest of the world. Bitcoin is too volatile, so I'm throwing that one out.

Gold can be a store of value and some other industrial use cases, but it doesn't work logistically. Obviously, it's yellow metal and such. That's what I mean by it. The dollar really is the only game in town at this point. And maybe there's a version of stable coins or government-backed stable coins that comes to be that is also dollar-backed. It could be maybe the world order changes in the future. It's hard to predict those things. I'm not stating any of that.

I'm just giving you the numbers. Right now, 90% of global FX transactions are done in the U.S. dollar. Okay, so 90% says it's pretty much the reserve status. And then if you look at bank reserves across the world, the dollars, 57% of them, euros, 20%, the yen. is five, the pound is four, then it goes on down to the twos and the ones, and the less meaningful currencies that exist in bank reserves. Yes, gold has come up in bank reserves. That might be a common pushback I'd get. Part of it's because gold is doubled, and so the amount that was in bank reserves is now worth more. Fine, but still, if you're looking at fia currency,

dollar is still king, and that's my take on at least for the near future. That's what I've got for you today. That's my Around the Horn. Those are my econ points. I wish you well. Have a Lovely evening. Reach out, send more questions. We love them. Have a good night. 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 or sell securities. No investor process is free at risk. There's no guarantee that the investment process or

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