The Dividend Cafe - Tuesday - March 10, 2026

Episode Date: March 10, 2026

Brian Szytel from Dividend Cafe (Tuesday, March 10) recaps a mixed market day that started higher on optimism from comments that the war would end soon, then faded to flat after reports of Iran laying mines in the Strait of Hormuz amid intensified Middle East conflict. He notes modest economic releases: the NFIB Small Business Optimism Index at 98.8 (near historical average) and February existing home sales above expectations at over 4 million, suggesting some housing thaw as rates ease. He explains the Strait’s global importance (about 20% of oil/LNG and 30% of helium) and estimates a ~0.4% GDP impact if disruptions persist, contributing to higher long rates and a steepening yield curve. He advises against timing volatility and discusses defense contractors, emphasizing fundamentals and the ability of large firms to develop or acquire new technologies. 00:00 Market Open And Headlines 00:48 Economic Data Check In 01:27 Strait Of Hormuz Stakes 02:18 Rates And Yield Curve 02:51 Staying Invested Through Volatility 03:19 Defense Stocks And Cheap Weapons 04:50 How We Invest In Defense 05:16 Wrap Up And Q And A 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. Welcome to Dividend Cafe. This is Tuesday, March the 10th. I'll be your host, Brian Saitel, with you here today from our West Palm Beach, Florida office. On a mixed day, ultimately in markets, we actually started off quite positive most of the trading day. And this was a follow-through from yesterday from announcement from Trump and the administration that the war would be over soon. And it was almost complete. And markets took that as accurate and rallied towards the end of the day and into this morning. And then we gave up some of that as there was news about Iran laying mines in the Strait of Hormuz. So the situation is ongoing.

There's an intensified conflict in the Middle East as we've written about quite a bit. And we're muddling through here these markets. There were a few pieces of economic news that were out. Neither of them were big needle movers, but we did have an NFIB Small Business Optimit Index that we talk about often come out just a little under. We got 98.8. This is right at the historical average for a long period of time. I'd call it a decent number, but something to pay attention to in the economic front, small businesses are a large part of the overall economy. Existing home sales beat in February by a pretty decent margin. We got over $4 million there. We were expecting $3.8. on existing home sales. So with rates coming down a little bit, you're starting to see potentially

some signs of thawing in this sort of stuck housing market that we've been in for many years, but that's ongoing. So again, back as far as how markets moved, the straight of her moves accounts for an enormous amount of energy transportation, but not just energy, other things. It's 20% of the world's oil and liquid natural gas that is not functioning through there, but it's also, for example, 30% of helium. And while that sounds silly, that stuff is used to make all the semiconductors. The ramifications from global GDP standpoint are about four-tenths of a percent. And so the longer this goes on, the more of those economic ramifications really become more meaningful and more impactful. And so we need to have those things open.

So when you hear things about mines being laid or a continuation of this, obviously not good overall, and that's what caused markets that were up to close flat on the day. You ended up with a totally flat market. Dow is down 30 points. Everything else. was at zero. You did have a move higher on the longer end of the yield curve. So you got 10-year rates that were at five basis points. A lot of that has to do with energy volatility. And so you're starting to see a steepening yield curve because short-term rates are still likely to come down. Remember, Warsh is going to come in May and consensus that he'll lower interest rates by about 50 to 65 basis points before the end of the year. So short-term rates coming down and the long-term

rates with inflation coming up equals a steep yield curve. Not necessarily a terrible thing from an economic standpoint, but nonetheless, something to be attention to. So yeah, our comments is that until this actually eases up in that straight and we're less worried about the economic hit, just to expect volatility to stay. And so the comment is just not to try to time it. Our clients certainly don't, and we don't, but for any of those listening or reading that are out on your own in this thing. And acid allocations assigned the goals are really the better way to get through this in the meantime. Question in there today was a thoughtful question. It was about the defense contractors. So think of the real large-cap defense companies in this country. When you hear things like

the cheaper stuff, kamikaze drones, inexpensive missiles that are being launched at developed and wealthy in comparison countries that are using very expensive defense systems, Patriot missiles and things, that it's not sustainable, that the stockpiles of those expensive weapons, both from a monetary standpoint, but just the amount of them would run out and the cheap stuff has more stain power. My comments are this, that cuts both ways. So wealthy countries that have expensive defense systems, one, as a percentage of wealth, can afford it. And then two, can also afford the cheap stuff to throw it the other way. And then arguably it could afford the expensive stuff to throw the other way, too. So there is some game in that paradigm. But as far as companies that are startups creating

these things, drones, attack drones, different lasers, different jamming technologies. If there's a demand, meaning that they work and they can be used at scale, then you've got to think that the large-cap defense contractors can develop them themselves or require those businesses. And so there's still an investable thesis to it. And just remember, those large-cap defense companies basically produce weaponry on all angles, expensive stuff, less expensive stuff, defense, attack weapons for both sides of any conflict. And so there's a pretty defensible, upon intended, a pretty defensible investment thesis behind that. But with us, as always, it's all about bottom up fundamentals. And so we're looking at each company, business by business, not just by a sector, because there's a conflict. In fact,

most often it's by the rumor, sell the news on these things. If you're just buying energy and defense, because you think that there's more de-globalization and conflict in the world with Russia, Ukraine and U.S. Iran, then I'd say you're a little late to that party. But those are my comments there on the day. I hope it was helpful as I walked around the horn. I'll be back with you tomorrow and I encourage you to reach out with questions. We love getting them. Thanks so much. 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

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