The DC Today - Thursday September 29, 2022
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 29 September 2022
⏱️ 12 minutes
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Summary
We reversed much, although not all, of yesterday’s broad-based rally in today’s market sell-off – what one day giveth another taketh away. I unpack it all in a deep capital markets dive for you in today’s video and podcast links below that you’ll not want to miss.
Dow: -458 points (-1.54%) S&P: -2.11% Nasdaq: -2.84% 10-Year Treasury Yield: 3.77% (down 6 basis points) Top-performing sector: Energy (- .13%) Bottom-performing sector: Utilities (-4.07%) WTI Crude Oil: $81.47/barrel (- .83%)
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 | Welcome to today's DC today. It is September 29th, and we've got a lot to kind of unpacked today. |
| 0:19.7 | Obviously, I'm not David. I'm Brian |
| 0:21.6 | Saitel and write these occasionally, but first time I get to come to you here on the podcast. |
| 0:26.4 | So hopefully you're able to see this and hear this. |
| 0:29.8 | Kind of go through yesterday a little bit. I know David did. It's an interesting day. |
| 0:33.5 | Yesterday was a very big broad market rally across the board. Stocks rallied, bonds rallied, you know, very broad-based. |
| 0:40.9 | And it was large part to do with the Bank of England coming out and buying longer-dated |
| 0:47.4 | bonds, which is quantitative easing. |
| 0:49.3 | So they were on the same path that we were on to raise interest rates, to fight inflation, |
| 0:55.6 | to start to reduce their central bank balance sheet, the Bank of England's balance sheet, and we're on path to do the |
| 1:00.4 | same and sort of reversed course. And we've kind of referred to that as they were the first |
| 1:05.6 | large central bank to blink as far as taking some of the weight of the foot off of the gas pedal of monetary |
| 1:12.8 | tightening. The reason they did that, I mean, there's a new administration there. There's a new |
| 1:18.3 | prime minister trust. There was a very large, most in 50 years large tax cut package that she put |
| 1:24.9 | through. And subsequently, the debt of England really sold off hard, |
| 1:30.5 | as did the currency. Those two things tend to go hand in hand. So you had five-year gilts, |
| 1:35.7 | which is the equivalent to our treasury, go from something like a three percent yield, |
| 1:39.9 | actually a little below a three percent yield two weeks ago ago to over a four and a half percent yield, |
| 1:45.2 | meaning the prices were in freefall. And of course, the pound sterling is now, or almost was to |
| 1:50.8 | parity with the dollar. And so they, I don't know if I'd call it a little panic button, but, you know, |
| 1:55.5 | it's a decent reverse course to go ahead and start, start buying bonds again. And to the market kind of looked at |
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