The DC Today - Thursday October 6, 2022
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 6 October 2022
⏱️ 10 minutes
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Summary
A little market move down today – nothing to write home about. But more information on big picture you will want to listen to right here …
MARKET ACTION
Dow: -347 points (-1.15%) S&P: -1.02% Nasdaq: -0.68% 10-Year Treasury Yield: 3.83% (+7 basis points) Top-performing sector: Energy (+1.82%) – fourth day in a row Bottom-performing sector: Utilities (-3.30%) – second day in a row; rare and nasty WTI Crude Oil: $88.90/barrel (+1.26%) Key Economic Point of the Day:
Initial jobless claims came in at 219k, higher than the 203k expected (though continuing claims came in a tad less than expected) Mortgage rates at 16-year high … (6.75%)
ASK DAVID “Given the tight labor market and recognizing the number of people that left the workforce over the past 2+ years, is it reasonable to expect a decrease in unemployment numbers any time soon? If it’s not reasonable to expect a decrease in unemployment numbers, do you think the Fed should use this criteria as a benchmark for monetary policy?”
~ Ed D.
Unfortunately, I do believe unemployment will go higher, and I do believe it will be relevant to Fed policy. Technically their dual mandate includes full employment, so if they pursue a monetary policy that increases joblessness I believe they will reverse course. I don’t think it is the benchmark they say it is, but I do think right now it gives them cover in non-effective monetary tightening (if anyone still believes the Fed Funds rate is causing inflation I have a bridge to sell them, assuming I can get the parts and labor).
Links mentioned in this episode: TheDCToday.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. |
| 0:12.6 | Hello and welcome to another DC today, your daily market synopsis. Let me give you kind of the breakdown of everything in the market today. |
| 0:23.3 | Thursday, October the 6th market day of the week, fourth market day of the month. |
| 0:29.1 | The Dow was down 347 points, a little over 1%. S&P was down a little over 1%. |
| 0:34.8 | NASDAQ was down about 0.68. So we were pretty flattish yesterday after a big comeback. |
| 0:41.4 | We were up massively Monday, Tuesday, gave a little back today. |
| 0:44.8 | I wouldn't say there was anything big surprise going on. |
| 0:47.9 | The 10-year treasury yield was up seven basis points. |
| 0:50.9 | You know, let me look with a two-year closed. |
| 0:53.8 | With the 10-year closing at 3.83, |
| 0:56.8 | it's getting closer to where it was last week. It's still, you know, a decent amount below. |
| 1:05.2 | It's high of 4% from last week, but it went from 4 all the way down to 3.7. Now it's kind of in that |
| 1:12.4 | middle range at 383. The two year was up 10 basis points. So, you know, it really does kind of |
| 1:18.9 | take away some of the mystery as to why stocks that have a little sell-off today, particularly |
| 1:23.5 | with another big upday and energy, the bond yields were higher. |
| 1:29.5 | And I'm just, that seems to be the greatest correlation we have right now. |
| 1:32.6 | And so I'm sticking to that story. |
| 1:35.4 | Energy was the top performing sector. |
| 1:37.3 | In fact, it was the only positive performing sector, but it was up 1.82%. |
| 1:41.6 | It was the fourth day in a row of energy being the top performing sector. |
| 1:46.6 | And I think from its bottom now as a sector of last week, energy is up something like 15% in a |
| 1:54.3 | week, maybe even a little more. |
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