The Dividend Cafe - Tuesday - March 25, 2025

Episode Date: March 25, 2025

Market Update and Economic Insights - March 25 In this episode of Dividend Cafe, hosted by Brian Szytel from West Palm Beach, Florida, the focus is on the recent positive momentum of the S&P 500 and the economic factors influencing the market. Key topics include tariff implementations, consumer confidence reaching a four-year low, steady new home sales, and the relationship between currency and trade policies. The episode emphasizes the interconnectedness of economic factors and the importance of understanding diverse perspectives in financial decision-making. Sitel concludes with a brief Q&A and an overview of current market performance. 00:00 Introduction and Market Overview 00:49 Economic Indicators and Consumer Confidence 02:01 Real Estate Market Update 02:53 Trade Policy and Currency Discussion 05:03 Q&A and Market Wrap-Up 06:09 Conclusion and 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 to Dividend Cafe. This is Tuesday, March the 25th, and Brian Seitel is with you here from our West Palm Beach, Florida office on a, believe it or not, third day in a row of positive S&P 500 here. And we actually just popped above a 200 day moving average yesterday on it. So we're making some positive momentum here as a recovery after a tough market that circled around tariffs primarily.

And some of the reason for that is that they are considering more of a two-step process to how those things will be implemented on April the 2nd, TBD. And as the back and forth on this has been just completely day to day. So it's hard for me to tell you exactly what will come down the pike at this point there. But overall fairly positive on the day, although really quite quiet. We had a couple of pieces of information out in the economic calendar on the day, although really quite quiet. We had a couple of pieces of information out in the economic calendar on the day. Consumer confidence fell to a four year low in February. That was again, largely around some of the uncertainty and volatility

regarding trade and policy. And what a difference a few months can make because just as of December, essentially post-election and into holiday season and some seasonality, we had some of the all-time high in consumer confidence too. So take it for what it is. We always look at this as much of a lagging indicator. It's how people have felt, but what they've just experienced. There is a forward expectations component to it that was also low, but again, these

are surveys and people. And so all of us are subject to recent history in our mind and what we've just experienced as far as our outlook. Now, over a prolonged period of time, you have deterioration and consumer sentiment that's meaningful and lasting, meaning many months, quarters even on end. It can create a self-fulfilling prophecy of a change in behavior. You look at these numbers, we just don't spend a lot of time at the Bonson Group, placing anything actionable around a consumer confidence level. Particularly when it's volatile like that.

We also had new home sales number. There was actually two pieces of real estate info. There was new home sales that were just about in line with expectations. They were up 1.8% for the month, and that was an annual amount of 676,000 new homes. So about in line there on new home sales. And then you had the Case Schiller 20 city home price index that was slightly more than forecast just by 10th.

It was up 4.7% year over year. So if you think about what inflation did the last year and the home price index, slightly above inflation, but not a whole heck of a lot. Part of the reason is that there's just a lack of inventory, a lack of activity, and then there's higher mortgage rates and so forth, as housing still remains fairly stuck. But on the day, there was comments in there around On the day there was comments in there around the trade policy, whether it's tariff related or whether it is related to the currency and the exchange rate between currencies like the dollar and the yuan, for example. Stephen Mirren had a write-up, David wrote about this today, effectively a policy around

enhancing trade and reorganizing it through either tariffs and or a weaker currency. But to the latter part on the weaker currency, I think the analogy he had was really good, which is, does our standard of living really change if you're going to push a scale up and down or jigger it one way or the other to read a certain number? In other words, we sell a certain amount of widgets around the world. When people buy those widgets, they have to pay for them in US dollars because that's what they're denominated in. And a weaker currency would make cheaper widgets, in which case you would think demand would be higher and we'd sell more widgets around the world. But the flip side to that is, of course, we tend to import

more things than we export. That's what that is trying to offset, by the way. It's trying to get us to export more. But since we do import more and or just a whole lot, when you're talking about a weaker currency, of course, the widgets you're buying from overseas become more expensive. And so there's no free lunch with it. Whether it's interest rate policy, it's inflation, it's currency, it's trade. All of these things are just completely correlated and tethered to one another. So it doesn't operate in a vacuum.

You can't just do one thing and expect it not to affect several other factors and often have just as offsetting factors to what you were trying to accomplish in the first place. So best to let the free world trade and rotate on its own. That's what we believe in free capital markets and interest rate policy and currency ultimately should be set around fundamentals. Meaning our standard of living will go up if we're doing a better job and creating better widgets and that will just work itself out naturally since the people will

want the widgets around the world and they'll pay for them. Whether they're more expensive or less expensive will provide headwinds and tailwinds but ultimately will win the day and that's American competitiveness and that's what we ultimately want. I would go so far as to say a strong dollar currency would be in the best interest of the country over a longer period of time, but I do understand the flip side to that, which actually segues into the Q&A, which is a question around how do you read other people's opinions when they aren't necessarily your own? And I think it just goes without saying that you have an open mind.

The only way to have a strong position that you believe in, in principles, is to know the other side of that and to have made a proper and informed decision. And so reading opinions in other people's writing that I may not agree with, I think is marginally less important, but similarly as important as reading information that is for the position that I take on certain things. That's the way I would answer that question. David said it in a similar fashion. It was a good question nonetheless.

So all that to say a listless day here in markets. So a bit rudderless. We ended up positive on the day. Just slightly. The Dow is up four points, which is flat. Now S&P was up nine points, which is also just about flat. And the NASDAQ was up about half a percent, which is 80 points. Ten year move to two basis points lower on the day.

So there you have it for this Tuesday. I will let you go for this evening. I encourage you to reach out with questions because we love to get them. And we'll talk to you tomorrow. Thank you very much. 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

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