The Dividend Cafe - Wednesday - July 29, 2026

Episode Date: July 29, 2026

Brian Szytel hosts Dividend Cafe on Wednesday, July 29, describing a volatile “Fed day” as the FOMC held Fed funds unchanged at 3.50%–3.75%. Markets swung sharply and finished broadly lower, with the Dow down 1,153 points (about 2%), the S&P 500 down 1.5%, and Nasdaq down 1.7%, alongside higher rates, rising Middle East tensions involving the U.S. and Iran, and WTI up nearly 7%. He notes a dramatically steepening yield curve, reduced reliance on forward guidance as described by Warsh, and futures implying a 53% chance of a September hike and 31 bps of hikes through year-end. He highlights a divided Fed with three dissenters and discusses a question comparing AI hyperscalers to GFC-era “systemically important” financials, contrasting past equity wipeouts with proposals for government equity participation in AI firms. 00:00 Welcome and Fed Day 00:43 Market Whipsaw Recap 01:17 Rates Oil and Geopolitics 01:38 Yield Curve and Fed Signals 03:01 AI Bailout Question 03:30 GFC Parallels and Differences 04:28 Wrap Up and Takeaways 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 back to Dividend Cafe. This is Brian Saitel with you here this evening as your midweek host on Wednesday, July 29th, and quite a down day overall in markets indeed. This is actually a Fed day. So we had the FOMC conclude their two-day meeting and then give their announcement today, which was to leave rates on change. changed. So we're at 3.5 to 375 on Fed funds. And while that was largely priced, if you look at Fed futures before the meeting, it was a 70% chance that we're going to do just that. I'm just telling you, the market was very much unsure about that. And there was a lot of volatility today

around that. There was an 800 point drop before the announcement. Right after the announcement, the market rallied 200 points above. So that's a huge thousand point swing. And then it ended up selling off and closing down 1153 points on the day. And that sounds dramatic because it is. It's a big selloff. But just remember when your Dow is at almost 51,500, that's a 2% move, a little bit more. So big down dance stocks, the S&P fared a little better. It was down a 1.5%. Nasdaq was also down about 1.7%. Interest rates were up meaningfully. Again, you've got a heat up in Middle East tension between the U.S. and Iran. That was part of this selloff today. It was angst over Fed monetary action and then also inked over comments that Trump made about hitting a Ron Hart again. Ten

year was up nine basis points. WTI was up almost 7% on the day. So just a down day across the board. What I will say is that the yield curve dramatically steepen with the Fed holding rates unchanged. Warsh has basically said that they're going to do away with forward guidance. They don't want the Fed to be leading the market. They want the other way around where markets are able to set prices efficiently and not necessarily about anticipation of what monetary policy will or won't do, and that being the sole focus. There still is a 53% chance for a September rate hike. So that's about the same as it was.

But if you look at pricing across the other part of Fed Futures curve, there's 31 basis points of hikes through the year end. That was actually down a bit from 41. So all this to say, the held rates, it was actually a little bit more doveish than expected. expectations still there for the same amount of rate hikes before the end of the year, steepening the yield curve. That's usually a positive sign for economic growth. The short end was down, the long end was up, and he had the 30 year above 520 on the day. Quite a bit of volatility around all this, and for what it's worth, the, I can remember that Jay Powell is still on the

committee. He was actually not one of the dissenters. There was three dissenters total, which is a higher number than we're used to seeing. Okay, I'm going to shift gears. The question that came in today was a very good one, I thought, and a stew one. It was about are the tech companies and the AI hyperscalers taking a page from the playbook of the financials or they're convincing government that they're basically systemically important. And if they go down with AI not producing revenue or whatnot, it's bad for the whole economy and they're setting up some sort of a bailout in advance. And actually, it is different this time around. One, I'll say the similarities back then in the GFC or pre-GFC.

It was just a financial story. That was a large sector. It was the real estate story, was the lending, it was mortgages that you could get with no income documentation. The whole thing is, and then this huge bailout as the entire system was at jeopardy this time around, different story. You've got companies like OpenAI suggesting that the government actually become equity holders in some of these firms now before there's any distress so that when the entire economy is at stake or when China is the threat or who knows what, that the government's already a partner. and so that the equity wouldn't be jeopardized like it was in the financial crisis. If you remember, Lehman equity was wiped out, Bair Stern's equity was wiped out, AIG's equity was wiped out, and so was B of A. the stock, those stocks were down 90%. So there you have it as far as some of the similarities and differences between what's going on in AI potentially and what was reminiscent of yesteryear. Fed Day, I will say there's some positive takeaways from it,

which is the Fed is taking a day. different course and not taking sole responsibility for which directions market trade. And ultimately, I think that price discovery clarity will be good for capital markets overall. With that, I will let you go for this evening. If you have questions, please reach out. They're always great. We'll get back to you as soon as we can. And if I don't speak to you, have a good evening. Bye, bye. The Bonson Group is a group of investment professionals registered with Hightower Securities LLC, member FINRA and SIPC, and with Hight Tower Advisors, LLC, a registered investment advisor with the SEC. securities are offered through Hightower Securities LLC.

Advisory services are offered through Hightower Advisors, LLC. This is not an offer to buy ourselves securities. No investment process is free risk. There's no guarantee that the investment process or investment opportunities referenced Tyrion will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities, reference Tieran, may not be suitable for all investors. All data and information referenced herein are from sources believed to be reliable.

Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary and does not constitute investment or vice. The Bonsor Group in Hightower shall not in any way be liable for claims and make no express or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced here in. The data and information are provided as of the date reference, such data and information are subject to change without notice. This document was created for informational purposes only, that opinions expressed, are solely those of the Bonson Group and do not represent those of High Tower Advisors' LLC or any of its affiliates.

High Tower advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client's individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor for any related questions.