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The Dividend Cafe is your portal for market perspective that is virtually conflict-free, rooted in deep philosophical commitments about how capital should be managed, and understandable for all sorts of investors. Host David L. Bahnsen is a frequent guest on CNBC, Bloomberg, and Fox Business. He is the author of the books, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (Post Hill Press) and The Case for Dividend Growth: Investing in a Post-Crisis World (Pos ...
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Today's Post - https://bahnsen.co/3qmaIH8 For a long time there was only one country on earth dealing with a bubble that had burst, spending way more than it was bringing in, seeing revenues decrease, juggling banks that weren’t actually solvent, and running extreme monetary policy to try and keep all the holes in the dam from bursting. That countr…
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Today's Post - https://bahnsen.co/3C3vY77 As expected, the House passed the McCarthy-Biden debt ceiling bill, and the Senate will do their part by this weekend. The bill passed by a vote of 314-117, quite the nail-biter, with 165 Democrats voting yes and 149 Republicans voting yes. This allows us to now change our focus to the next end-of-the-world…
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Today's Post - The debt ceiling bill has gotten through the House Rules Committee and it appears nearly certain that the House will have the votes tonight for passage. What happened here proved to be even less dramatic than I predicted, and I was predicting that the media posture here was recklessly and shamefully melodramatic. I promise you this, …
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Today's Post - https://bahnsen.co/3qlozNA “I agree with you overall concerning shareholder vs. stakeholder priorities in a company’s motivations. It did occur to me, however, that often the bad behavior examples provided by the advocates of the stakeholder paradigm don’t really involve a company acting in the best interests of shareholders, but rat…
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Today's Post - We live in interesting times. Is that fair to say? Does anyone disagree with that? I didn’t think so. Now, I didn’t say, “We live in unprecedented times.” I think there are a lot of reasons to barely ever say that (Ecclesiastes 1:9 is a good place to start). I certainly understand that some things seem unprecedented, and many times t…
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Today's Post - https://bahnsen.co/45JhuqH The debt ceiling discussions advanced today though no final deal was struck. The adjectives and nouns across the headlines refer to “fresh urgency,” and “potential default,” and “sensitive phase”. The Fed seems to be telegraphing a “pause” at the next meeting … The new language being thrown out is whether o…
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Today's Post - https://bahnsen.co/3Mxdgto While everyone tosses and turns about the debt ceiling debate in Washington, I want to remind everyone what is the real scenario playing out in the economy. The Fed’s tightening may or may not “succeed” in their mission to destroy those inflation-creating jobs (their words, not mine), but it certainly will …
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Today's Post - https://bahnsen.co/41Xc7Rq The drama in Washington is supposed to be all the rage and I am torn because I do know it is the primary mover in minute-by-minute market fluctuations, and I also know it may be what readers most want to know about (adding to the burden to write about it here, which is the purpose of DC Today), and yet the …
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Today's Post - https://bahnsen.co/3Mz8Q5k All eyes are on the talks between Speaker McCarthy and President Biden regarding the debt ceiling and what negotiated bill may or may not be possible. They met earlier today and re-convene this evening. Over the weekend, President Biden said they were considering invoking the 14th amendment to declare the d…
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Today's Post - https://bahnsen.co/458Bjr7 Everybody is aware of the challenges that have surfaced in regional banks this year and the fears that such problems will become more contagious in other banks as well (other regionals, smaller banks, community banks, etc.). I am not sure that the reasons for the challenges are fully understood, and that is…
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Today's Post - https://bahnsen.co/42OsEsd Welcome to DC Today, I am Trevor Cummings filling in for David Bahnsen. Today we have an update on unemployment claims, existing home sales, daily market moves, and even Donald Trump shows up in today’s Ask David. Links mentioned in this episode:TheDCToday.comDividendCafe.comTheBahnsenGroup.com…
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Today's Post - https://bahnsen.co/3OnePfQ So markets rallied hard today as both sides in this Biden/McCarthy negotiation assured listeners that a default won’t happen. Here’s the lay of the land in the debt ceiling debate: It is fair to say “deadlines” thrown out for various actors in this are more bark than bite – negotiating tactics and all that …
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Today's Post - https://bahnsen.co/3IgucD9 All eyes were on the White House today as debt ceiling talks continued. The report after talks ended today that “no deal has yet been reached” was, ummm, not a story. I remain skeptical that a real deal gets done before there is a real deadline and moment of hysteria, but I do still believe these talks set …
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Debt ceiling talk and other cool things today in the special Monday edition of DC Today … Today's Post - https://bahnsen.co/3o2Wdad Links mentioned in this episode:TheDCToday.comDividendCafe.comTheBahnsenGroup.comBy The Bahnsen Group
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Today's Post - https://bahnsen.co/3ptUr29 We are going to do something a little different today in the Dividend Cafe, or at least different from what I normally like to do. While “current conditions” are less interesting to me in the Dividend Cafe, various macro themes and long-term trends represent the focus of this weekly missive. That said, ever…
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Today's Post - https://bahnsen.co/3MjilGN The Ask David is so long below I will put most of the writing attention on that today (see below). Interest rates all dropping and fed rate expectations in the futures markets strike me as the major market story of the day (and week). And seeing bond yields collapse on the front end of the curve in perfect …
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Today's Post - https://bahnsen.co/44MFjx8 So the CPI today came in today at 4.9% year-over-year, the lowest we have seen now since April of 2021. 5% had been expected so it is another month of slightly lower than expected year-over-year movement. And yet … Shelter is showing an +8.1% year-over-year price inflation still now in April. Yep. +8.1%. So…
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Today's Post - https://bahnsen.co/42ACgWM The total amount of commercial bank deposits that have left the banking system since the Fed began hiking rates is now just shy of $1.1 trillion. Money market mutual funds have taken in $751 billion. Of the total aggregate move higher in the S&P 500 so far this year, 93.5% of it has come from the 20 largest…
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Today's Post - https://bahnsen.co/3HL0cPd There are reports about the White House being open to a short-term debt ceiling increase, and I actually don’t doubt the White House would do that, or even that they may be willing to give up some energy permitting reform as a trade-off to getting that done. What I am skeptical about is whether or not the R…
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Today's Post - https://bahnsen.co/3VABmav I think this is a good week to do something many people will not be expecting. I don't do clickbait, and I loathe the sensationalism of most financial writers. But because most financial writers make their living writing about finances and I make my living managing real finances, I have never been captive t…
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Today's Post - https://bahnsen.co/3VGvMUb A huge theme right now in market punditry is that small caps are under-performing big caps, and that this speaks more to macroeconomic reality than the fact that big-cap companies have mostly hung in there. As the reasoning goes, small-cap companies are more dependent on banks and financing and credit condi…
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Today's Post - https://bahnsen.co/42hbBOA So the Fed today raised rates a quarter point as expected, now to a range of 5%-5.25%. They indicated a “wait and see” approach about the next meeting though futures right now reflect a 91% implied probability that they are done raising rates. The language change of their statement implies that this is corr…
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Today's Post - https://bahnsen.co/3LLhr5A Regional banks were hammered today as clearly, the fear is contagious at this time, with some major regionals down -15%, -28%, and even others still down -9% to -12%. Short selling has picked up substantially in this space, so there is a need to watch it rationally and not technically. The basic criteria fo…
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Today's Post - https://bahnsen.co/419OGnL The big news of the week has been First Republic Bank’s fate, which at midnight last night was still up in the air. By 3:30 am ET, the situation was clarified in the newswires – First Republic was put into FDIC receivership, and the FDIC was concurrently entering a purchase and assumption agreement with JP …
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Today's Post - https://bahnsen.co/3ncX8V7 The subject of bank stability has really been a big conversation topic since the failure of Silicon Valley Bank and Signature Bank back in mid-March. People have wondered who was to blame, what went wrong, what could have been different, and what else is still going to happen that we may not know about. I h…
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Today's Post - https://bahnsen.co/3oR1amD Rally day and then some as earnings continue to outperform expectations. Add that to a weaker-than-expected economy (because everyone knows bad news is really good news in Fed-bizarro land), and voila – the Dow goes up over +500 points. Links mentioned in this episode:TheDCToday.comDividendCafe.comTheBahnse…
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Today's Post - https://bahnsen.co/3V6B23f The House Rules Committee voted at 2:20 am to send the House spending legislation to the floor for a vote, implying that Speaker McCarthy has the 218 votes needed to pass a debt ceiling increase that also cuts $4 trillion from government spending over the next ten years. We watch and wait. The Fed Funds Fut…
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Today's Post - https://bahnsen.co/3LESWXT It was sell-off mode today in stocks, with the Dow down -1% and the Nasdaq down -2%, yet it really was the -50% drop today in First Republic stock that seems to be the catalyst for the market turmoil (the drop lower in the broad market that accelerated around 10:00 am PT was just minutes after the accelerat…
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Today's Post - https://bahnsen.co/3oDNT0y Earnings season is off and running and, so far, looks pretty good (or at least not that bad). But it is really early, and the heart of earnings season will be this coming week and next week, and we will keep you posted each step of the way. Dividend Café took a real look inside the inflation story of the la…
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The Dividend Cafe
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Inflation Then and Now, or: The 'Where Were You' Accusation
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Today's Post - https://bahnsen.co/40qjm3u I enjoyed a wonderful dinner with my long-time friend, John Mauldin, last week, and something we discussed is going to be the subject of today’s Dividend Cafe. John is one of the most well-known newsletter writers in our industry, and I have been reading him every single week – no exceptions – for 23 years.…
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Today's Post - https://bahnsen.co/3mP5Ad0 The talk is warming up for the debt ceiling debate to become a major market story for a time. As I was writing months ago, there is no leverage for the Republican House if they don’t first pass their own debt ceiling bill (essentially, a bill they actually pass with 218 or more votes that does raise the deb…
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Today's Post - Day-to-day bond volatility continues to be quite elevated, and very few are really talking about it. I believe as QT inevitably moves to QE (or at least non-QT), you will see bond volatility come down. Equity volatility already has. 80% of days in January were up or down > 1%, 74% in February, 65% in March, and just 36% so far in Apr…
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Today's Post - https://bahnsen.co/40eo9VP I would say, at this point, the market is definitely pricing in yet another rate hike at the next FOMC meeting two weeks from today (futures are up to 87% implied odds). Markets obviously haven’t cared much. Bond yields today didn’t move a lot. Sometimes you have to report what is and not what ought to be, …
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Today's Post - https://bahnsen.co/40b95Ih Links mentioned in this episode:TheDCToday.comDividendCafe.comTheBahnsenGroup.comBy The Bahnsen Group
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Today's Post - https://bahnsen.co/4018FUN This is a unique Dividend Cafe but one that I think will have something for everybody. It speaks to a mentality and a framework that has more than just economic ramifications. It was inspired by a conversation I had with my wife on Wednesday night about some other things, and as our conversations often do, …
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Today's Post - https://bahnsen.co/43GLAdk The markets went into big-time rally mode today and, of course, had already rallied a lot from mid-March levels. The CPI number was quite disinflationary yesterday, as Trevor walked you through in the DC Today, and we saw the disinflationary report in CPI yesterday and now further disinflation in PPI today …
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Today's Post - https://bahnsen.co/3muBoUs Today was a highly anticipated day, as we were set to get the latest look at inflation data. This data came in lower than expected, which appeased markets at first glance but lost its luster throughout the trading day. Some pointed to the FOMC minutes and the glooming use of the word recession that took the…
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Today's Post - https://bahnsen.co/3moAxo7 Days like today tend to be pretty boring because stock and bond markets are limited in what they are likely to do a day ahead of a news announcement like tomorrow’s CPI reading. The fed funds futures have a 70% chance right now for a quarter-point rate hike next month, and we will see how markets respond to…
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Today's Post - https://bahnsen.co/3GAu2FF I hope everyone had a wonderful Easter weekend and are feeling excited for the week ahead. Markets should be pretty weird this week, but now I just say that every week because I have such a high chance of being right when I use the word “weird.” Today didn’t do anything to embarrass me in this prediction (m…
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The Dividend Cafe
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Back in Charge: OPEC's Return to Economic Dominance
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Today's Post - https://bahnsen.co/3Ui1J4z Last weekend’s news was not a Lehman bankruptcy, a Silicon Valley depositor backstop, or a Credit Suisse acquisition. It was not even driven by U.S. forces, let alone the usual cast of characters in the Fed, Treasury, or FDIC. Rather, it was OPEC+ making an announcement of production cuts in oil. It didn’t …
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Today's Post - https://bahnsen.co/40EOqh5 First of all, congratulations to the Huskies of the great state of Connecticut (where some of TBG’s favorite clients reside) on their NCAA championship. I assure you it was the news story today that deserved the most press coverage. It was a pretty boring day in the market, and all the news wanted to talk a…
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Today's Post - https://bahnsen.co/3ZFg4ZY So congratulations to the San Diego State Aztecs and the UConn Huskies, who will go head to head tonight for the NCAA college basketball championship. It has been a tournament to remember – thrilling upsets and last-second shots – and enough investment lessons to generate a whole Dividend Cafe! The written …
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Today's Post - https://bahnsen.co/40OgHkJ Any time I use some sort of sports analogy in the Dividend Cafe I get a lot of emails from people who connect to it and say they love it, and then I get emails saying, “come on, I don’t care about sports – please just stick to the market!” I am never offended or bothered – Abraham Lincoln had a line about p…
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Today's Post - https://bahnsen.co/3G3Vdsa So the market went up again today, went negative in the middle of the day, then rallied back in the second half of the day (see chart below). The FDIC is looking to move the cost of the recent bank failures to the banks that didn’t fail (read: to their customers), Sen. Joe Manchin has decided he regrets his…
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Today's Post - https://bahnsen.co/3JRB2yV I read an interesting line from an analyst I read daily in my morning research this morning … “if the bulls are to reclaim control of this market, beta likely needs to reassert itself; hasn’t happened yet.” Of course, this sort of begs the question – bulls of what? Well, if one means “the market index,” the…
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Today's Post - https://bahnsen.co/3TNPuMZ There are two things I think I have amply covered over the last few weeks: (1) Equity market volatility; and (2) the Bond market rally. Both things are true – equities have been all over the map, up and down, even as they are mostly flat (or actually slightly up) since all this banking commotion began. And …
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Today's Post - https://bahnsen.co/3noFOMJ There is a lot today on Housing, which is a matter of practical significance to a lot of you, and there is a lot today on the banking mess and the Fed, which is also connected to Housing. So I think you’ll find today’s missive practical and interesting. After reports throughout the weekend that both First C…
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Today's Post - https://bahnsen.co/3JF6mRh We are in a moment of “volatile Sundays” in the financial services industry. This is when market actors, policymakers, movers, and shakers have big news to announce on a Sunday in an effort to “beat markets opening”, or as Ben Bernanke once joked that his memoir would be called, “before Asia opens.” I lived…
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Today's Post - https://bahnsen.co/3TGllyM That the market gave up -500 points in fifteen minutes at the end of the day yesterday but then rebounded +500 points this morning is, to me, validation of my theory regarding yesterday: that it was a closing speculative trade. Fundamentally, the facts on the table (where they are known) are not really subj…
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Today's Post - https://bahnsen.co/3TAGcni All that matters today is what the Fed did and said. And what they did was raise rates a quarter point. And what they said was that “financial conditions have tightened” (well, there you go). And he said that these tighter financial conditions and tougher lending criteria from banks will “factor into their …
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