The Dividend Cafe - Wednesday - March 11, 2026

Episode Date: March 11, 2026

On March 11 from West Palm Beach, Brian Szytel reports a mostly negative but relatively benign market day amid volatility tied to Iran, the Strait of Hormuz, and surging energy prices (Brent ~$92.77, WTI ~$88.29). February CPI came in as expected: headline +0.3% and core +0.2%, with year-over-year headline 2.4% and core 2.5%; he notes current oil moves could have lifted year-over-year inflation to ~2.8–2.9%, though de-escalation or large IEA releases could offset. He highlights shelter’s lagging but cooling impact (rent measures up just 0.1–0.2%), important given shelter’s 35% CPI weight versus energy’s 7%. He discusses a new Fed chair in May aiming to cut short rates while shrinking the balance sheet, arguing productivity gains from AI and weaker labor data support easing. He also answers that TBG charges no extra external fees for alternative funds beyond internal fund expenses. 00:00 Market Recap and Volatility 00:44 Energy Prices and CPI Print 01:30 Oil Shock Scenarios and Offsets 02:34 Shelter Inflation Finally Cools 03:35 New Fed Chair and Rate Path 05:00 Alternative Funds Fees Explained 06:35 Wrap Up and Next Update 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 to Dividend Cafe this Wednesday, March the 11th, Brian Saitel. I'm your host here from our West Palm Beach, Florida office. On mostly negative in the stock market today overall, we had the Dow closed down about 289 points. S&P was pretty flat, down just five, and the NASDAQ was just slightly positive. So continued volatility around what's going on with Iran and what's going on with energy prices and what's going on with the straight of Hormuz. And with that, like I said, markets have actually been quite benign in this thing. They're only down a couple percentage points, one to two since this thing began.

So directionally, that's not what's happening. Volatility is what's happening. And also huge volatility in the energy paradigm. So Brent today closed. I'm looking at it now at 9277 and WTI was 8829. So both of those moved significantly higher. And it's meaningful for today's report. And I'm going to go through that because today we got the CPI number. So this is a fresh read on inflation. It's through February, which technically this thing began just after this report. So the numbers are good. They came out right in line. We got a 0.3% for headline and then 0.2% for core when you stripped out food and energy. So that puts year over year on headline at 2.4 and on core at two and a half. So not quite at the Fed's 2% target, but I'm going to call it horseshoes and hand grenade type of close there. It's getting pretty darn close there. That said, if you were to put in where Brent and WTI is gone now, so WTI is up something like

19. It's actually after I wrote that, it's up a little more, 20%. And then Brent is at 15%. If you were to put that into today's number and kept all the other numbers the same, it would have added about 0.3 to 0.4% on year-over-year numbers, which would be right around 2.8 or 2.9%. So meaningful, yes, but a lot of things here. One, I mean, the war can end tomorrow, so there's de-escalation. That might be wishful thinking, but it may happen before the next DPI print. Two, the IEA said that they're going to release 400 million barrels. That's double what they released during Russia, Ukraine. So that's why Brent dropped after it was up 6% closed flat on the day. So there's things like that can happen. Strategic petroleum reserves can get released, all of those things. So there's a lot of moving parts

to this thing too. But the other component to it is things won't remain the same in the rest of CPI anyways. So there's going to be give and take. The one comment I wanted to make that's important that we've spoken about for well over a year is the shelter component. Because shelter is a lagging number it is a trailing number. And so if you look at real Zillow rent index numbers, they are not only not raising anymore. They're in some cases falling. That number inside of CPI has been trending down towards reality.

And including today, if you look at it, it was only at 0.2%. If you actually look at the rent of primary residences, they were only at 0.1%. That's the lowest since January of 2021, after the world was essentially ending during the pandemic. That's an offset. And the reason is that energy only makes up 7% of CPI and shelter makes up 35%. These things are going to offset one another in a real meaningful way.

It's one of the reasons that the numbers on February's print and CPI were pretty good. And it's going to be also a benefit as we get in the higher energy prices priced in those things as well. So keep all of that in mind. And I'm saying all of these things because it's important as we have a new Fed chair coming into the seat in May because his goal. as has been telegraphed. I assume all of it is changeable on market conditions, but was to lower short-term interest rates and at the same time reduce the balance sheet. So it's on one hand stimulative or easing monetary policy, easing financial conditions, and then on the other hand doing the opposite, which is selling assets off the balance sheet to bring it down to a

smaller size. It should be yield curve steepening because you're lowering short-term rates and selling stuff that's out on the curve. Yes. But I don't know. don't know that this paradigm of Iran and this war is going to change that. With these offsets, if you remember, the labor number was not good at all. We lost 90 plus thousand just a week ago. The combination of the words like this, it'll be transitory, will be a word that they're going to use on inflation because of energy. Then they're going to talk about the gain and productivity that we've seen from AI, and that's just getting started. That's actually deflationary. So that gives us power to lower rates. And then they're going to say,

that the labor number has started to move down, and that's one of their mandates. And so they have the ability to still lower interest rates. So that's actually good for markets. And generally speaking, I believe Warsh is the right person for that job. So I think that's, those are all basically positive things. Question in there today was about costs on alternative funds. Alternatives have been in the news, interestingly, more than I can ever remember. And whether it's private equity and the dearth of exits that need to happen, or it's the private credit markets or whatnot. But the question is around cost fees, and so it's not market related, but are there extra costs to own an alternative fund? The answer is not externally. TBG assesses its advisory fee, as always.

This is for advice, for fiduciary planning, for fiduciary advice, and for managing the money. There isn't an extra cost to buy an alternative fund from our side inside of any fund structure. It doesn't matter what it is. Mutual fund, closed-in fund, ETF, alternative fund. Yeah, there's an internal expense ratio. But the return is net of that anyways. So that's what would be shown in an account. I'm not saying we shouldn't care about what they are. I'm just saying that we already managed to that. Everything we own is institutional share class and everything is going to be the benefit of economies of scale of our $9 billion business in Hightower's $300 billion business. So fees are fine. The other thing is you can't own an alternative investment. outside of a fund anyways, realistically, especially with a private credit fund. The only way to own those loans would be to underwrite them yourself and use your own capital to do it. I would never recommend that. But if we want exposure to some of these asset classes, yes, there's internal cost to get them, but then again, there's the benefit of the return and then also the diversification of another asset class. So that's my answer on that question.

I hope that's helpful to you today. Lastly, it was basically most of what was around the horn on the day, And I went through things a bit fast, but I hope it was engaging because there's a lot of things going on in the world right now. And whatever I've said that sparks a question, reach out with it. And I will get back to you with an answer. Otherwise, I will not be back with you tomorrow because I'm traveling for business on the podcast, but the written will be in your inbox. So with that, have a good evening. I wish you well. The Bonson Group is a group of investment professionals registered with Hightower Security's LLC, member Finra and SIPC,

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