The DC Today - Thursday, March 14, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
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🗓️ 14 March 2024
⏱️ 7 minutes
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Summary
Today's Post - https://bahnsen.co/4cjgL2o
Markets were lower on the day with some higher than expected Producer Price Index numbers for the month of February that were up .6% versus .3% expected. Keep in mind, the year over year number on that same headline gauge is only at 1.6%, albeit up from the 1% read the month prior. If we annualize the last three months that included some of the higher figures, we get to around 3% year over year. This may not be exactly where we want to be at this point, but as I have mentioned, the path towards our target was just never going to happen in a straight line either.
Commercial real estate values have begun to show some recovery in the past few months. The chart below shows both the decline in values we just went through and the beginning of recovery, but more importantly, the 20%+ run up that preceded it. The protective equity during the recent decline in values was hugely inflated leading into it, so when we hear about a looming crisis in something like commercial office loans, from an LTV perspective there was already a larger cushion, and borrows make payments when there is equity. I am not saying there isn’t stress in non class-A office, but if prices are leveling I am not sure it will materialize into more at this point.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:14.1 | Hello and welcome to D.C. today. It's Thursday, March 14th. It's great to be with you on this Thursday here. |
| 0:24.2 | The markets sold off a bit today. |
| 0:27.2 | We actually closed more than 100 points off of the low on the Dow, |
| 0:31.9 | but still closed around 137 points lower, |
| 0:35.4 | which is about a third of a percent, |
| 0:37.0 | pretty much across the board for the |
| 0:38.3 | S&P and the NASDAQ as well. |
| 0:41.4 | And the reason was that we got PPI numbers today. |
| 0:44.3 | So these are the producer price index figures. |
| 0:47.3 | It measures input costs into businesses and one measurement of of input inflation essentially, which of course |
| 0:55.2 | will ultimately work its way through to, to prices outside of inputs. |
| 1:02.8 | The PPI number was 0.6% for the month. |
| 1:06.0 | It was supposed to be around 0.3%. |
| 1:08.8 | So it's quite, that was headline. |
| 1:11.2 | So quite a bit higher on headline from expectations, although we saw both the CPI numbers |
| 1:17.1 | also, you know, a little higher. |
| 1:18.9 | So I think it was somewhat expected. |
| 1:20.7 | And frankly, I don't think the market, the market's reaction was all that bad, frankly, |
| 1:26.9 | from it. So I wouldn't read into it a ton. |
| 1:28.9 | But the core number, if you strip out food and energy, was at 0.4% versus 0.2%. |
| 1:35.7 | So also, you know, higher than expected. |
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