The DC Today - Monday, October 17, 2022
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 17 October 2022
⏱️ 14 minutes
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Summary
Greetings from the world’s greatest city where we kicked off money manager meeting week with significant discussions with the CIO, the taxable fixed income team, and the levered loan group at Voya, and this afternoon met with the real estate team, private equity group, and head real estate folks at Blackstone. It won’t be this many meetings every day this week (it better not be), but it was a great way to start off the week. My summary of the whole week will be prepared at the end of the week for public consumption.
- Futures opened last night up +100 points and stayed positive throughout the night even as Japanese markets struggled. By bedtime, we were about +150 in overnight futures and at the crack of dawn this morning (now on eastern time zone), futures were pointing to a +300-point open.
- The market opened up +500 points and got as high as +675 points, and stayed very level throughout the day.
- The Dow closed up +550 points (+1.86%) with the S&P 500 up +2.65% and the Nasdaq up a massive +3.43%.
- UK bonds rallied violently this morning as yields collapsed, no doubt the key correlative event to the U.S. stock market rally overnight. The 30-year and 20-year dropped by a stunning 40 basis points, and each point on the yield curve from three years up to ten years was down by almost the same. Anyone who bought British bonds last week made about two years’ worth of return in about 24 hours.
- The ten-year bond yield closed today at 4.01%, up less than a basis point on the day
- I am not sure what to think about the measurement of bond returns in 1721 when churning butter was the most profound technological advancement of the decade, but I do know this: 2022 is going in the history books for global sovereign bond returns
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:13.4 | Well, hello and welcome to the Monday, D.C. Today, I am running between meetings here in New York City. And luckily I got most of the D.C. |
| 0:24.3 | Today written because you know Monday we do the long form legacy style written edition. And that |
| 0:31.9 | commentary, I was able to get a lot of stuff written over the weekend and did a lot this morning |
| 0:36.2 | before the meetings began, |
| 0:38.7 | wrapped up what I need to, have the closing data that I'm going to go through with you here in a |
| 0:42.8 | moment in our written version. And now we're leaving one meeting and have a dinner event tonight. |
| 0:49.2 | And so you won't get to hear from me or you won't have to hear from me for the next three days because |
| 0:55.2 | the meeting schedule is so intense here in the city, Tuesday, Wednesday, Thursday, that I'm not even going to try. |
| 1:01.8 | I'll end up doing you guys a big disservice with the daily podcast. |
| 1:05.2 | So I've asked my partner, Trevor Cummings, who some of you may know from thoughts on money, his weekly writing and |
| 1:13.9 | podcast and video. And he is the director of our private wealth advisor group and a partner at the |
| 1:20.2 | firm. And he'll be handling the podcast and video for Tuesday, Wednesday, and Thursday. And I will |
| 1:25.9 | have the normal written dividend cafe for you on Friday. |
| 1:29.8 | So just quickly, it was a big rally here in the markets. |
| 1:32.7 | This up and down volatility is continuing some big up days last week and some big down days. |
| 1:38.2 | And now another big update here today. |
| 1:40.6 | I do think the market was substantially oversold on a technical basis, and I don't have a |
| 1:45.3 | better explanation for why the market was up so much today. It opened up 500 points and basically |
| 1:51.7 | just kind of stayed there all day. At one point, it got up to like 650, closed up 550. So you had a |
| 1:58.7 | pretty significant rally at the open that was evidenced in the future markets this morning and then just kind of stayed there throughout six and a half hours of trading. |
| 2:09.8 | The S&P was up 2.65% and the NASDAQ was up 3.4%. A big part of the story is UK bond yields. And I mean, this is |
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