The Dividend Cafe - Wednesday - January 14, 2026

Episode Date: January 14, 2026

In today's episode of Dividend Cafe, Brian Szytel discusses the overall market decline and the shift towards value-oriented sectors. He highlights the impact of delayed government statistics on retail sales, home sales, and inflation. Despite mixed earnings from major financial institutions, value stocks and sectors such as industrials, energy, and materials have shown positive performance at the start of the year. Brian also addresses a thoughtful question on whether the US dollar could be replaced as the reserve currency, emphasizing current market dynamics and the lack of a stable alternative. He concludes with insights into upcoming interest rate policies and potential judicial rulings on tariffs. 00:00 Introduction and Market Overview 00:16 Sector Performance and Market Rotation 01:02 Economic Indicators and Earnings Reports 03:15 Discussion on the US Dollar and Global Trade 06:27 Conclusion and Final Thoughts 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. Good evening and welcome in to Dividend Cafe. This is Brian Saitel back with you here on your daily recap. We had a down day overall in markets, although we ended off the worst levels of the day. It was one of those big rotation days from growth and then some of the more overvalued parts of the market into more of the value-oriented. sectors. I put a chart in there today, just going over the relative highs of each of the sectors in there comparatively to one another. And you'll see the more cyclical sectors, financials, some of the energy sectors, and then coupled with the healthcare names, all of which are trading at less than market multiples for the most part. That's not to say a lot of these sectors aren't

necessarily historically cheap, but nonetheless, you can see that play out. And the market breadth continues to widen a little bit away from what has occurred over the past several years. The market continues to evolve here into 26th. Retail sales come out much better than expected. It was a six-tenths versus a four-tenths. And normally I would say that shows strong and good things for the economy. And of course it does. It's just that that number is delayed. It was a November read that we got just recently because of the delay in the government shutdown. You also had some decent numbers out of the existing home sales that were a little bit better than expected. And then after yesterday, CPI print on inflation, we got the producer price index today.

That was basically in line. It was actually a little cooler than expected it. But again, that was also a delayed figure. So markets moved necessarily on those two figures today much. It was much more to do with just earnings that have started to come out. And you've seen somewhat of a mixed result in the financials. Most of the numbers themselves in those earnings have actually been very good in those big money center banks. But the stocks had just done so well last year. Most were up 20, 30 percent or more, 50 percent in a lot of cases last year.

And so you had some underperformance on share price. What was going on today really was net rotation. And if you look at value stocks, if you look at the small caps, which are up something like 6 percent year to date, those things have been lagged over the past couple of years that have started to perform now. And it's really just a valuation story of where there's value to be had here in markets. The year is only, what, 10 trading days into it here. Nothing of what I'm saying is that this is going to be a linear path or anything like that. It's just it tends to be an evergreen way that we look at things. Of course, we couple that with dividend growth. And that's where we end up allocating capital.

But if you look at some of the industrials, the energy names, like I said, even the materials have really looked pretty positive here so far to start the new year. and that was different than what we saw in 2025. Some of the laggards, utilities definitely had a lot less relative highs versus lows, and those sectors had just run up. It's usually a pretty boring sector, and a lot of those names are trading at 25 times earnings. So from around the horn on the economic side,

and then just what went through markets, I wouldn't call it directionless, but there also wasn't a lot of big takeaways here either as we head into the middle of the week into the latter half here. Question in there today was about the dollar. This is actually a common question, but the way this particular client and dear friend of mine laid out the question I thought was thoughtful, it was really just about stewardship. So if you have fiscal mismanagement, we're creating a lot more debt in this country as we run deficit

spending. If you combine that with some of the new developments on the world stage, you can say that it's tariffs or some of the geopolitical issues that we've seen with Venezuela or Iran, those types of things, doesn't that mean that some of those bigger countries or a consortium of them, call it the BRIC nations, would replace the dollar as the reserve currency and want to favor something else or even crypto for that matter? And the reality of that is this. There really isn't something that's competitive at this time, something that is trusted that is actually stable, which completely rules out the cryptocurrency question and is liquid and just something that

the world can really gravitate towards as something to replace what the dollar has been, since really the 80s, been used as that reserve currency at this point. You also have a demographic issue. The U.S. is still a very dynamic economy. It's a growing nation from a population standpoint. If you look at other areas like the Eurozone or Japan or even China now, they really don't have that behind it at this point. And so there's not a lot that I would take away from an investment thesis to try to place around the what-if scenario of dollar becoming less competitive. competitive at this point. And then remember, too, the U.S. is a debtor nation. And so we're exporting dollars as we're running the trade imbalance. Those dollars are flooded to the rest of the world,

and that's why they represent 88% of global foreign exchange transactions. It's basically the center stage of how global trade is functioning at this point. So it's not something that I would necessarily worry about. Obviously, we don't want to run debts. And so it's something that needs to be addressed. And the hope, I guess, over time is that it will be addressed. through entitlement spending and at some point in which there isn't a crisis or a forced moment in time where you have to address it. I'm skeptical on that. Nonetheless, that's my thoughts on that really good question that was put out there. For the most part, we're getting into earnings now, and I do think there's a shifting of gears where we can look at fundamentals. We know that corporate margins are basically

at all-time highs, and we know that the economy is still growing, call it 2%. It's not gangbusters, but it's also very positive. And then that will juxtapose with interest rate policy still in restrictive territory, but have come down a lot from five and a quarter down to three to half, three-seventy-five range. That's still in an area that I think is restrictive for overall economic activity, but it isn't such that is really causing anything to fall out of bed either. And I think the Fed knows that. There's going to be a new Fed president that gets put in there.

We don't know exactly how that's going to shake out here. over the coming months, but I assume that we'll get that news soon. And then we also have the Supreme Court ruling on how tariffs will ultimately get either solidified and stay the same or there'll be other mechanisms that this administration needs to put in a place to keep them in place as their agenda warrants it too. So it's a bit of a short recap here today, but that's what I've got for you. Appreciate your questions, as I always do. Please reach out with them. And with that, I'll let you go for this evening. And thank you for listening to the Dividing Cafe. 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.

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