The Dividend Cafe

Today's Post - https://bahnsen.co/4y9YwqV

David Bahnsen delivers a quick Monday Dividend Cafe update from Chicago after travel disruptions, covering a strong market day led by communication services and technology while energy fell on a nearly 5% drop in oil; he notes the S&P 500 is near an all-time high even as market breadth has deteriorated sharply. He discusses rising margin debt and how its use has shifted toward non-purpose lending, highlights record ETF inflows into technology as a contrarian signal, and reviews news including media access litigation, progress on the Paramount/Warner Brothers deal, Apollo buying a 16% stake in the New York Yankees, and a newly announced AI task force. Economic data included flat industrial production, stronger retail sales, weak homebuilder sentiment, and declining housing starts, while Fed commentary shifted toward expecting a possible October hike and noting Chairman Warsh’s skepticism about a knowable neutral rate and strict data dependency; the Bank of Japan also raised rates.

00:00 Welcome and Travel Update

01:17 Market Rally and Sector Moves

02:13 Market Breadth Warning

03:29 Margin Debt and Leverage

05:15 Tech ETF Inflow Surge

05:39 Headlines and Deal News

06:27 Policy and Global Trade

07:30 Economic Data Roundup

08:04 Housing Slump Signals

09:16 Fed Outlook and Warsh Takeaways

11:18 Oil and Midstream Positioning

11:55 Wrap Up and Disclosures

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Today's Post - https://bahnsen.co/4j4mxuI

David Bahnsen discusses the Fed’s quarter-point rate hike, arguing it was largely “performative” because markets had already tightened financial conditions and the Fed is now following rather than leading. He notes the fed funds futures market implies an 87% chance of another hike this year and reviews the political speculation around Chairman Kevin Warsh and President Trump, including Trump’s post calling for 1% rates while diverting attention to trade deficits. Bahnsen highlights the unanimous 12–0 vote, the Fed’s focus on price stability amid supply-shock pressures, and the neutral mechanics of paying 3.9% on reserves. He reviews muted bond-market moves, elevated mortgage rates near 7%, and cautions against overreading immediate stock-market reactions, emphasizing earnings, AI, oil, and valuations as bigger drivers than the fed funds rate.

00:00 Welcome and Fed Week

00:44 Why the Fed Matters

02:08 Performative Rate Hike

05:11 Politics and Independence

10:54 Midterms and Next Hike

11:52 Unanimous Vote Rationale

14:34 Bond Market Reaction

17:02 Stocks and Volatility

19:05 Practical Takeaways

21:28 Closing Thoughts

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Brian Szytel reports a pre-close market rebound from Newport Beach on Thursday, September 17, with the Dow up over 300 points, the S&P up over 1%, the Nasdaq up about 1.5%, and the 10-year yield falling to 4.95% as the curve flattens; oil prices eased and recent sector rotation briefly reversed as tech regained bids and equal-weight indexes underperformed cap-weighted. On the economic calendar, the Philly Fed Manufacturing Index beat expectations and initial jobless claims fell to 196,000 versus 208,000, while housing starts and pending sales missed slightly. He addresses fears about AI by noting historical patterns of technology skepticism and euphoria, citing the 1990s productivity paradox and subsequent productivity surge. He also answers a question on $100+ oil alongside Fed hikes, saying it has not always signaled recession and that current expected rate increases are modest unless policy overdoes it.

00:00 Market Rebound Snapshot

00:26 Rates Oil And Rotation

00:57 Economic Data Check

01:47 AI Fear And History

03:06 Oil Fed And Recession

03:57 Wrap Up And Next Read

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Brian Szytel recaps a volatile Fed day in which the FOMC unanimously raised rates 25 basis points, moving the range from 3.50–3.75 to 3.75–4.00, a move largely priced in. He notes dot plots implying one more hike before year-end (around 4.00–4.25), with market reaction reflecting short-term yields up slightly, long-term yields down slightly, and the 10-year unchanged near 5.01. Markets sold off (Dow ~-740, S&P ~-0.6%, Nasdaq ~-0.1%) but improved off the lows, with internals not signaling a major risk-off flush. Economic data included stronger-than-expected August retail sales (1.2% vs 0.8%) and weaker NAHB homebuilder sentiment. He also answers a viewer question, distinguishing price spikes in items like oil from broad inflation driven by money supply, referencing CPI/PCE and headline vs core measures.

00:00 Welcome to Dividend Cafe

00:17 Fed Rate Decision

01:03 Yield Curve Reaction

01:28 Why Markets Lead

02:10 Economic Data Check

02:29 Market Close Snapshot

03:30 Inflation Question Explained

04:44 Wrap Up and Thanks

04:52 Disclosures and Disclaimers

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Brian Szytel reviews a down market day driven by oil staying above $100 (Brent 108, WTI 105), ongoing Middle East tensions, and the 10-year Treasury closing near 5%, noting equities are only a few percent off highs. Using an S&P 500 forward earnings estimate of about $406/share next year, he argues a 5% pullback implies ~17.5x forward earnings and a 10% drawdown ~16.6x—normal moves that would still look reasonable given expected double-digit earnings growth and a more tech-heavy index. He contrasts today’s resilience with 2023’s 5% yield episode when markets fell and credit spreads widened, saying spreads remain orderly. Ahead of the FOMC, markets price a 25 bp hike; he doubts bigger moves. He addresses weak 20-year auction headlines and explains that despite large AI-driven corporate issuance (hyperscalers spending $300–$400B; ~$2.4T total corporate issuance), pensions and insurers still strongly demand long-dated Treasuries.

00:00 Market Backdrop Today

00:44 Earnings And Valuation Math

02:27 Why Markets Stay Resilient

04:23 Fed Day And Bond Auction

05:08 AI Debt Versus Treasuries

07:16 Data Check And Wrap Up

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com