The Dividend Cafe - Wednesday - December 3, 2025

Episode Date: December 3, 2025

Dividend Cafe: December 3rd Market Update and Economic Insights In this episode of Dividend Cafe, host Brian Szytel from The Bahnsen Group provides an update on stock market performance, noting gains in major indices and a rotation from growth sectors to value-oriented sectors. He discusses the impact of a Wall Street Journal article about the potential nomination of Kevin Hassett as the next Fed Chair, current Fed policies, and interest rate expectations. The episode also covers recent economic data, including a significant miss in ADP payroll numbers and better-than-expected ISM services data. Brian answers a listener question about asset allocation and rebalancing, emphasizing a customized, goals-based approach over a one-size-fits-all strategy. 00:00 Introduction and Market Overview 00:42 Fed Chair Speculations and Market Reactions 02:20 Economic Indicators and Market Impact 03:53 Ask TBG: Asset Allocation Insights 05:45 Conclusion and Final Thoughts 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 Wednesday, December the 3rd. Brian Saitel is with you from our West Palm Beach, Florida office here at the Bonson Group on an update in stocks. This is actually the second update in a row. The Dow closed up 408 points on the day. S&P 500 was up about, a third of a percent. Nasdaq was marginally up about 15 basis points. But all across the board, stocks were higher. You have a continued rotation from some of the growth and technology heavy NASDAQ names into some of the more value-oriented sectors in the market, some of the multiple names, and that make up more of the Dow these days. And that's why you saw that disparity across the indices. Interest rates were lower on the day. This was largely around a Wall Street Journal

article that was not a coincidence, that it was released about. about the next Fed chair being most likely to be Kevin Hassett. We had been hoping that it would be Kevin Warsh instead, which would be more of an independent Fed choice as a next governor. But we think that this would be a release from really the White House about the likely next Fed chair being Kevin Hassett instead. And the Wall Street Journal article didn't pick up news that wasn't known. It was more the White House testing the market to see the reaction.

And I think it got what it wanted because the market was a little higher today. interest rates were a little lower. I think Kevin Hassett is finally suited for the position, but is less so than more of an independent version of what we would have gotten out of Warsh. That said, we still have six months before the next Fed Chair comes into play anyway. So Powell is going to be in office for quite a while. This is December here. So you've got a period of time where you're going to have, if they name this person soon, I don't know about awkward, but there's a period of time where the new governor will have a lot of power. And the words that uses in the marketplace when there are speeches and press conferences and things like that. In the

meantime, the Fed, Jay Powell and current FOMC will have their decision for you next week on rates and there's a 90% chance they're going to lower them by 25 basis points. So that's where we are on Fed policy. We also know actually from sources in the White House that they are looking for the next NEC chair and that's Kevin has its current job. So probably not a coincidence there. But But overall, frankly, markets have digested that news in a fairly positive way. There was a couple of pieces on the news on the economic calendar. We had November ADP payroll numbers. Remember, I've been saying since the delayed government release of a lot of numbers, we've

been waiting for fresh numbers and we're finally getting some. But this ADP private payroll numbers, they absolutely missed for what we were expecting for November. We got a loss, actually, of $32,000 versus a consensus for a gain of $10,000. And that's a decent miss there for the month on private payrolls. And it's one of the reasons interest rates have come down and some of the growth expectations have come down in some of these weaker employee numbers. But the other number that we got was ISM services on the day. This was actually better than expected.

We got a 52.6. This is a pretty good read for a fresh number in November on part of the economy that is the largest part. Remember services make up two thirds of the economy and having a beat is important. You've got basically a slightly weakening labor print today and a slightly gaining services print. And where you saw job losses for what it's worth in the labor market was not in big companies. These were smaller companies. And you've seen a couple of recent defaults come up on the smaller business side as well. And just keep that in mind.

Interest rates remaining high, you definitely feel that more as a small company than you do as a large company. And you're seeing that in some of the labor reports. And you're seeing that in some of the bankruptcies that have come up recently. By and large, things are performing fine, but you're starting to see some of these cracks, nonetheless. That's one of the reasons they're starting to lower interest rates, and that probability keeps going higher. The last thing I'll have is the question in there today about for an Ask TPG. This was about asset allocation, and a great question about Benjamin Graham and the percentage of a fixed income or stocks to bonds in a portfolio and a rebalancing that should happen every six months, is that basically the same way that TPG does it, and do you recommend it that way? And the short answer is we love Benjamin Graham's work.

It's classic. I think it's indispensable way to look at investing in general and the fundamentals that have driven a lot of what we do. There are slight tweaks to it these days that have changed, but the acid allocation makes sense. The difference is we simply use it as a custom client-by-client basis versus a one-size-fits-all. The other thing is that when you look at risk, we define it not just as volatility because things moving up and down over time with a given level of return is fine. It's more about the

opportunity for permanent loss of erosion of capital and a failure to meet a financial objective would be the real risk that we would be solving to fight against. And of course we do. But that definition kind of moves away from the old definition of just looking at volatility and a little bit more towards goals-based investing. So you have an asset allocation. Yes, there's a percentage of stocks to bonds to alternatives that we would monitor. We would customize that for each individual client. We would look at volatility as simply risk that has taken or volatility that has taken to achieve a certain rate of return and then fight against the actual risk of permanent erosion of capital, which we don't allow, and the failure to meet a financial

objective. That's the way that we would look at it. As far as rebalancing goes, we don't do it every six months. I think that's too much. I think it becomes tax and efficient to do it that way. And we do it once a year. That's what we've done for years and years and years. I don't suspect that'll change anytime soon. I do believe in it. I just don't believe in doing it too much. So there you have it. That's the AskTBG. Those are the economic points. And that's what I have for you on today's Recap. Thank you for listening. Reach out with questions as always. Have a good night. 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

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