The Dividend Cafe - Tuesday - October 7, 2025

Episode Date: October 7, 2025

Market Update and Geopolitical Insights: October 7th Analysis In this episode of Dividend Cafe, Brian Szytel provides an update on the financial markets as of Tuesday, October 7th. He covers the recent performance of the DOW, S&P, and Nasdaq, highlighting a moderate sell-off in technology and value names. He also discusses the recent government shutdown impacting economic data release and provides insights on various Fed governors' positions on inflation and monetary policy. Additionally, the episode delves into significant geopolitical topics, such as the Russia-Ukraine conflict's impact on energy prices, evolving US-China relations, and the increasing risks related to maritime shipments. Lastly, Brian addresses a listener's question regarding the health and implications of companies going private. 00:00 Introduction and Market Overview 01:09 Federal Reserve Updates 02:51 Geopolitical Insights 03:43 US-China Relations and Global Trade 05:36 Private Companies and Market Liquidity 06:28 Conclusion and Sign Off 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 back in the Dividend Cafe. This is Tuesday, October the 7th. Brian Sightel is with you here. After a long and productive week last week in New York City, meeting with all of our different manager partners and portfolio managers. It's nice to get into a rhythm here back this week. actually had a little lower day on markets, but not not a whole lot. We had the Dow down about 91 points. S&P was down a third of a percent. NASDAQ was down two-thirds of a percent. So it bigger sell-off in technology than it otherwise was in value names. And then he had a treasury auction that actually went better than expected. And so rates dropped a little bit. Ten-year rate was

down three basis points on the day. We're at 413 on the 10-year yield. Around the horn on the economic side, there actually isn't a whole lot out. This is entering now the seventh day of government shutdown. So some of the data, there wasn't actually a lot on the calendar for today anyways, but there was some budget data that we didn't get from that happening and being in progress. But the SMP was lower on the day, and that was breaking a seven straight gains winning streak there. There was a couple of different Fed speakers out today. I wouldn't note it as something largely different, but you can just see the difference in some of their tone and rhetoric and the way that they're looking at the balance between the risk of inflation

or the risk to the employment market. So I'm going to run through this with you here real quick. So Mirren, remember, this is the newest appointed Fed governor that came in just recently a few weeks ago, continues to say that his foregust and inflation is far lower than most of his colleagues, so that restrictiveness on monetary policy going forward is a risk, and he's much more of a dove if you want to think of it that way than some of the others. San Francisco Fed Daily said that there's further room for cuts and still have a moderately restrictive pace and the concern is of the labor market. Minneapolis feds Kashkari said today that the risk of drastic interest rates would stoke up inflation again. And then Atlanta's Fed, Bostick, said that

the needs to be analytical and not just merely reactive. So they need to look at data and not just be behind, not be behind the curve. So I say all of that to try to get through it just to point out the vast differences in how most of these different Fed governors are looking at different things, and that's where we are on the Fed side. Comments today were more on some of the headlines and just how they can ultimately be the same day in and day out and frankly boring in different ways. And we do the best that we can with Divident Cafe to give you different perspectives. We read an awful lot of things from an awful lot of writers. Some of them, are mainstream, some of them aren't. One of them that is a little less mainstream, but highly

revered and sought after on the geopolitical side is our analyst Renee from Corbu, and he had a fascinating piece today on the amount of Russian oil capacity that has been taken offline. So the U.S. has continued to fund more advanced military equipment to Ukraine. And the shift now is to actually see Ukraine went outright against Russia in this conflict. And there has been an increase in targeting the energy infrastructure. And so with 40% of Russian capacity offline, significant because it really does lower the ceiling of global supply and capacity overall. You can really see this start to affect energy prices overall. The biggest places in the world where you've seen increase in energy production has been in OPEC countries and also the United States to offset some of

those things. But we're keeping an eye on this, and it's an important thing. That and also So the increasingly better relationship between the U.S. and China, both on trade and just general relations improving, this was one of our themes going into the year for 2025, that is likely going to be an outcome and one that was contrarian coming into the year. That's starting to now play out. There's still risks to this, particularly around chip manufacturing and Taiwan and how that will ultimately play out with that relationship. but some of the concessions that the Trump administration has given China

are just more than we really would have thought they would have been. And so you can see that open up. You've also had the relations between the U.S. and Venezuela break down even more. You've seen some of the footage that Hexeth has had out on the U.S. striking narcotic trade in the ocean. And all of these three things have impacts around the Maritime piece that you've seen and enjoyed over the last several decades with regarding shipping goods around the world, there hasn't really been a concern of conflict associated around them, and the risk of that is now increasing as well.

And so if you think about the cost of shipping, just understand that with more volatility, the cost can go up, and that ultimately is a form of inflation on prices, getting priced into consumers. So keep that in mind as well. So there's significant geopolitical things happening, U.S. and China, Venezuela, maritime shipments, And then, of course, the Ukraine and the Russia conflict that is ongoing.

All of these things are material, and all of them have market impacts. And I think not all of them are spoken about quite as much other than which company is selling more AI things to other companies that are in turn renting them back. That AI trade on the newsreel is just getting most of the attention. We wanted to shift that up for you a little bit today. Question in there today, I thought was a good one. Simple one about, is it a concern that companies are going private? But simple answer is no, it isn't. And frankly, it's a sign of strengths and robustness in our own capital markets economy

to have plenty of liquidity for companies to be able to go and stay private. There's a lot of benefits to it to not having to publish a quarterly result and to be a little bit more free in how a company is governed and ran and all those sorts of things. So I think it's healthy and organic and indicative of something that is more liquid and deep than anything to be worried about. There was a time where going public was really the only way. to obtain that kind of level of financing and also to get that level of multiple was to go into the public market. So now, speaking of the strengths that we're saying in liquidity in the private

credit market and leveraged buyouts, even stay private for longer and get similar multiples. And again, there's benefits to that. So that's what we have for you today, going around the horn on the day. I'll be back with you tomorrow, which will be Wednesday for Dividend Cafe. But for this evening, I will let you go and look forward to saying your questions. reach out as always and thank you for listening. The Bonson Group is a group of investment professionals registered with High Tower Securities LLC member FINRA and SIPC and with High Tower Advisors LLC, a registered investment advisor with the SEC.

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