The Dividend Cafe

Latest Episodes:

The DC Today - Tuesday, February 27, 2024 Feb 27, 2024

Show notes

Today's Post - https://bahnsen.co/3TeiRcu

A bit of a mixed day in markets with the Dow closing off its lows for the day down 96 points. The treasury raised $46B in seven year paper with a bid to cover ratio in the mid fifteens versus the thirteens where it has been (meaning there more buyers).

I suppose if the big news in Asia today was a ‘hotter’ inflation read at 2% in Japan with 10 year government bonds rising to their highest yield since 2011 at an eye popping .165%, its no wonder this auction near 4.32% cleared with more demand. Capital will always flow around the world where it is most rewarded and with attractive economic fundamentals and positive real yields, its why the US Dollar is nearing its 2020 pandemic apex and trading 17% above its historical average versus trading peers. Short term, this can make US exports more expensive which can slow growth, and also further trade imbalance as we already import more things then we export, but its a net positive long term. Tomorrows trade balance figures may reveal more there

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Monday, February 26, 2024 Feb 26, 2024

Show notes

Today's Post - https://bahnsen.co/3Iya6nH

Financial markets have absorbed the $1.5 trillion (or so) of quantitative tightening thus far quite well, but reverse repos were at high levels, and bank reserves (and money market liquidity) were not challenged. Will the Fed press more QT when RRP’s hit zero? Color me skeptical.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Lessons of a Japanese Milestone Feb 23, 2024

Show notes

Today's Post - https://bahnsen.co/3uNB8E7

History was made this week, and no, I am not talking about DA Jack McCoy retiring after 400 episodes on Law & Order, but rather the Japanese Nikkei closing at 39,098 on Wednesday night, its highest close in history, surpassing the previous closing high … which was (wait for it) … December 29, 1989. Yes, almost 35 years ago the Nikkei closed at 38,916, and finally re-reached and exceeded that level this week. It gives new meaning to the expression “buy and hold.”

But beyond the statistical and numerical takeaways of what may seem like a distant story unrelated to the plight of American investors, the tale of modern finance embedded in the last four decades of Japanese economic life is one for the ages. It has been a mild obsession of mine for many years, and I fully intend to finish a deeper white paper on the entire saga in the years to come. But today is not that white paper, as exciting for your insomnia as that prospect may be. Rather, I want to provide a succinct look at the history of what happened and what a key, if not the key, takeaway of the whole thing is for American investors.

Jump on in to the Dividend Cafe, and let’s pretend we left off in the mid-1980’s, in a very different time than we find ourselves today, Yet in many ways, perhaps not that different at all.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Thursday, February 22, 2024 Feb 22, 2024

Show notes

Today's Post - https://bahnsen.co/3OUiHEJ

A big rally day today across the board, but particularly in technology stocks primarily fueled by AI euphoria. I honestly, can’t remember a time when the point move in the Nasdaq was almost on par with that of the Dow, up X and X respectively in what is more and more feeling like 1999. Japan however, is feeling more and more like 1989, closing at an all time high today surpassing its market peak of 12/12/1989, about a month after the fall of the Berlin wall when instead of trading stocks I was trading baseball cards. You read that right, it has taken the Nikkei 34 years to regain a new height following of the largest asset bubbles in the modern era. Do valuations matter? Yes, indeed they do.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Wednesday, February 21, 2024 Feb 21, 2024

Show notes

Today's Post - https://bahnsen.co/3T6zpmI

We began the day positive at least for the few hours and lost momentum mid day. The Fed minutes released today showed broad agreement in the need for more confidence for inflation moving to a sustained 2% target before decreasing rates. While this wasn’t new information and followed what Powell already revealed in statement and his press conference following the meeting, the minutes showed more Fed constituents citing inflation risks with as their primary concern then overly restrictive rate policy, and that is what saw rates move a little higher this afternoon and stocks lower.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Tuesday, February 20, 2024 Feb 20, 2024

Show notes

Today's Post - https://bahnsen.co/48o28b5

I love this long-form DC Today and I love writing all the things that go into it. A Monday holiday weekend just gives me even more time and space so hopefully all the things today fill your cup.

Dividend Cafe went into the mailbag and provided some key economic definitions, some commentary on the Fed, a better understanding of capital spending, alternative investments, and even a reference to Steve Martin. Lots of great questions with succinct, understandable answers!

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

A Weekend Mailbag Edition Feb 16, 2024

Show notes

Today's Post - https://bahnsen.co/42K4tM5

Greetings from beautiful Palm Beach, Florida, where by the time you are getting this, I will have left my fourth Floridian city in five days and returned to New York City. It has been a whirlwind of a week in markets, in the data, in the political scene, in the weather, and in Florida speaking. But this week we took a whirlwind of questions covering a lot of topics and did a special “mailbag” Dividend Cafe. As always, the questions cover a lot of topics, and as always, the answers are meant to be succinct, direct, and clear. I love corresponding with your questions and I hope the wide audience of Dividend Cafe finds these questions (and answers) useful.

This week we cover some inflation/deflation vocabulary, even bringing back vital words like velocity and Japanification. We evaluate the way the BLS covers the hilarity of social media “influencers.” We look at what the Fed should be doing in the world they have created. And really, so much more!

Always feel free to reach out with questions of your own, and in the meantime, jump on into the Dividend Cafe.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Thursday, February 15, 2024 Feb 15, 2024

Show notes

Today's Post - https://bahnsen.co/4bySeX3

A consistently positive trading day in markets from start to finish, with the Dow closing at the highs for the day up 348 points. Yields have also settled in the last few sessions, which, as Tuesday’s knee-jerk move higher, gets normalized. Both the Empire and Philadelphia manufacturing index numbers came in meaningfully above expectations, and jobless claims also beat, so a few good data points in economic fundamentals.

We did get a second quarter of contracting GDP for Q4 out for both the UK and Japan, indicating recessions in both countries. Japan has now lost its third-place spot on the global GDP stage to Germany, falling to fourth. I mentioned this a few quarters ago, but it will be very difficult for central banks to stick to higher interest rates in slower-growth areas of the world. Stagflation will be something to watch in some of these areas if unemployment rises faster than inflation falls, but either way, rate cuts are soon to follow.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Wednesday, February 14, 2024 Feb 14, 2024

Show notes

Today's Post - https://bahnsen.co/49ia3bk

A more productive day in markets today following yesterdays sell off with with the SP500 regaining the 5,000 level and bond yields giving back some of yesterdays back up in rates. As expected, internals yesterday were quite negative at -13 to 1 on the advance/decline ratio, but without credit spreads even budging, we move on. For what its worth, in a meeting with House members following the inflation release yesterday, Powell mentioned that the CPI data was consistent with what they had expected.

Moving back to actual fundamentals that matter more to me, with over two thirds of Q4 earnings season completed we are tracking a 9% growth rate for the SP500 on the year, with a few more percentage points to the upside by the time its all said and done. Hard to see issues in that, and margins are holding in nicely at 16.7% with another 10% of earnings growth expected for 2024. I do think the latter ends up getting revised lower, but it remains a positive backdrop nonetheless.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

The DC Today - Tuesday, February 13, 2024 Feb 13, 2024

Show notes

Today's Post -https://bahnsen.co/49ze1fb

The big news today and cause for the market volatility was the latest read on inflation, with both Headline and Core CPI coming in one-tenth higher than expected (you read that right, above expectations by just one-tenth for the month). There were words thrown around like ‘hot’ inflation and a ‘spike’ in treasury yields circulated around the media to sensationalize it, and I am not at all making light of a down 524 point market day, but truth be told, while we are seeing a continued path of disinflation in this country, that path was never going to be a straight line. Keep in mind here as well that we came into today with 14 of the last 15 weeks to the upside by roughly 20% in stocks and a five-handle S&P 500 starting point. That long streak has only happened five times in history since 1928, with the last time being some 52 years ago.

Suffice it today, with a complacent VIX coming into today’s number, we were also frankly due for some of this sell-off. As one would have expected, yields moved higher across the curve on the day, with the 10YR closing up 15bps at 4.32%. We did come off the intra-day lows heading into the close, but a lot of this move felt overdone to me (both in yields and stocks.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Our TOPPODCAST Picks

Follow Us

Stay Connected

Related Podcasts

Links

Stay Connected