The Dividend Cafe - Wednesday - August 27, 2025

Episode Date: August 27, 2025

Market Trends and Insights - August 27 Edition In this episode of Dividend Cafe, Brian Szytel provides an update from Martin Newport Beach, California. He discusses the current positive market conditions in stocks and bonds. Brian highlights the importance of the PCE data release scheduled for Friday and analyses indicators from various market sectors like commodities, financials, and home builders. Additionally, he addresses the debate between private and public capital markets, explaining the growing volume and attraction of private capital over the past decade. He concludes by mentioning recent trends in IPOs and public financing, suggesting continued growth in these areas. Brian reminds listeners to tune in for more economic insights and encourages questions from the audience. 00:00 Introduction and Market Overview 00:40 Economic Data and Market Indicators 01:06 Market Sentiment and Cyclical Sectors 02:00 Global Economy and Market Expansion 02:33 Investment Strategies and Valuations 02:58 Private Capital vs. Public Markets 04:51 Conclusion and Upcoming Updates 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 Wednesday, August the 27th. Brian Sightell is with you here today from our Newport Beach, California, sunny headquarters here at the office of the Bonson Group. We've got a positive day in markets, although I am recording this before the close just by about 60 minutes here. things might change. But as of now and what is likely here through the end of the day, we've got a market that's generally positive and slightly so in bonds. The 10 years down, about a basis point here, we're at 424 now on yields. And again, some of this steepening yield curve is actually quite positive as far as what it typically indicates for the economy

and GDP. And I'll get into that in a second. There really wasn't a lot of new economic data out. Again, we're looking at that PCE number that's going to come out on. Friday, and that's what markets are going to pay attention to most. If you recall, several weeks ago, we had a hotter than expected PPI number and also CPI. So we have a good sense of where PCE is going to come in, which is probably about 0.3% for the month, which puts the year-over-year number right about 3%. The comments in the recap are really just about what the market is telling us, and I'm fine with what will always be the case, which is there's always going to be bowls and there's always going to be bears. And these comments aren't really meant to be either one of those.

They're really just, what are the signs? What is the market telling us? If you look at what is most cyclical, those sectors in the markets, think about things like commodity, materials, financials, things really sensitive to the economy, home builders. All of them are moving higher here and outperforming the financials, which are a big cyclical sector, are really showing a lot of signs of technical strength, both the 50 and 200-day moving averages. All of the stocks in the sector above those things. You've also had when we've had up days in markets, the outperformance and just the robust kind of breadth, the number of advances versus decliners inside of the small-cap sector as a sign of positive and good things about markets. But what it's saying about

the global economy is that it's expanding. You can talk about tariffs, you can talk about trade, all the geopolitical issues, and all the issues that exist. They're real and they're out there. Frankly, they always exist. But nonetheless, there's too many things in the market. telling you that things are expanding right now to be just ignored. So I'm fine with the naysayers or the doomsdayers saying that things are going to go down and they'll be, of course, correct at some point because they will. But I have to imagine that at some point, just hoping for the broken clock to be right twice a day is not a great strategy. And I think a more normal and reasonable one would be focusing on the valuations, looking at asset allocations and portfolios, looking at parts of the

market that are reasonably priced so that there's a hedge in case things do. turn bad, but sitting on the sideline or having an actual investment policy around something that should be versus what is, I think is a silly thing to do. And I see it too often, and I wanted to talk about it a little bit today. The question today was about private capital versus public. It was actually specific to what I had written about a week ago regarding that the private sector was just larger than ever versus public as far as capital raising. So if you're a startup or a new venture, a sizable one, and you're looking at a difference between raising either equity or debt in public markets versus private markets.

The private markets have just become more attractive for many years. This isn't a new thing. It's just dwarfed the amount of money raised over the past 10 years in those private markets. 2021 was the outlier, too. You had 0% interest rates. You had a lot of stimulus that came into the market during COVID. That frankly wasn't all needed, and so it's lost around in markets. and ended up being needed to be put to work, and a lot of it was put to work inside of private equity,

and so there was plenty of money there. A lot of deals got done that shouldn't have. A lot of valuations were insane, and a lot of that overhang is what my dear reader and commenter is asking about. He thought that it was a bad environment for private capital, and I'm saying it's good really. I'm just talking about two different time periods, so I'm looking at more of a 10-year period and saying that where once a private company had to go public, in order to raise enough money. Now, the private market is so large, both on the credit side and the equity side, that you just don't need to do that. And then you get all the

benefits of having the cards closer to the vest. You don't have to disclose everything. You can run your business potentially more optimally without having to be a public company. Those are all the benefits. The private market right now, by the way, represents over $20, $24 trillion. It's enormous. And there has been a pickup in IPOs and public financing. And in some of these things recently, particularly on the IPO side this year, on the tech side. And that's great. And I think those things will continue, both on the IPO side and also on M&A side. So there you go for the day. Again, we'll have more economic data with you tomorrow. Again, I'll be out. So David will have the recap for you and also the podcast tomorrow. Reach out with your questions. We love

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