The DC Today - Tuesday, August 8, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 8 August 2023
⏱️ 10 minutes
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Summary
Today's Post - https://bahnsen.co/3OoSkpj
From what I had initially thought would be a relatively quiet day in markets given the economic calendar, we ended up with a good amount of news to chew through in choppy markets with stocks selling off, a bid in bonds and volatility continuing its week-long climb. China reported softer than expected trade activity in exports and imports, reflecting its continued anemic recovery post-pandemic and further softness in its attempt to shift more towards a consumption-based economy.
Following Fitch's downgrade on US debt last week, Moody's joined the downgrade party lowering the credit rating on ten small and mid-sized US banks today, issuing a negative outlook on over a dozen larger banks. Higher rates, an inverted yield curve, and concern in commercial real estate, not to mention the stress earlier in the year with SVB/FRB, all seem well-known at this point, so this felt a bit behind the curve. Stocks traded lower on the news down over 450 points by mid morning before regaining through the rest of the day closing down only modestly. All fully unpacked in the podcast video link below.
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. |
| 0:14.7 | Well, hello and welcome to D.C. today. It is Tuesday, August 8th, and Brian Sightel here with you, go through the markets, |
| 0:24.1 | and what I thought would be kind of a quiet day just early this morning before the markets |
| 0:28.3 | looking over the economic calendar, ended up actually having some action to it. So I hope |
| 0:33.3 | you like the write-up I did, and then we can kind of go through the action on the day. |
| 0:39.7 | Markets traded off lower right away. |
| 0:41.4 | The futures were down, so I sort of knew that it was going to be a little lower day, |
| 0:45.0 | but we traded as low as about 450 points by about 11 o'clock or so Eastern. |
| 0:51.3 | So it was a decent down day. |
| 0:52.6 | Obviously, we had an up day yesterday. So it was giving |
| 0:54.8 | back what we what we had gotten the day before. But for the rest of the day, we basically |
| 1:00.0 | traded higher and we slowly steadily just kind of climbed out of it, regained almost two-thirds of |
| 1:04.7 | that drawdown 300 points or so. We ended up closing down 158 points on the day. The 10-year was lower by six basis points. |
| 1:13.3 | It was, bonds had rallied a little more earlier in the day and came off that a little bit. |
| 1:19.2 | So a little bit lower rates across the curve on the day. |
| 1:23.0 | The big news, which I think is what drew down markets initially, was a downgrade by Moody's, |
| 1:30.1 | which is a credit rating agency, just like Fitch is. |
| 1:33.9 | Fitch downgraded the U.S. debt last week, a week ago today. |
| 1:38.5 | So I'm sure this wasn't the reason, but it just sort of felt like they missed out on the |
| 1:43.0 | downgrade party and wanted to jump on that train. |
| 1:45.8 | So they downgraded part of the banking sector. |
| 1:49.0 | So this is the small and mid-sized banks. |
... |
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