The DC Today - Tuesday, February 13, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 13 February 2024
⏱️ 8 minutes
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Summary
Today's Post -https://bahnsen.co/49ze1fb
The big news today and cause for the market volatility was the latest read on inflation, with both Headline and Core CPI coming in one-tenth higher than expected (you read that right, above expectations by just one-tenth for the month). There were words thrown around like ‘hot’ inflation and a ‘spike’ in treasury yields circulated around the media to sensationalize it, and I am not at all making light of a down 524 point market day, but truth be told, while we are seeing a continued path of disinflation in this country, that path was never going to be a straight line. Keep in mind here as well that we came into today with 14 of the last 15 weeks to the upside by roughly 20% in stocks and a five-handle S&P 500 starting point. That long streak has only happened five times in history since 1928, with the last time being some 52 years ago.
Suffice it today, with a complacent VIX coming into today’s number, we were also frankly due for some of this sell-off. As one would have expected, yields moved higher across the curve on the day, with the 10YR closing up 15bps at 4.32%. We did come off the intra-day lows heading into the close, but a lot of this move felt overdone to me (both in yields and stocks.
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, welcome to DC today. It is Tuesday, February the 13th. |
| 0:25.1 | And I'm coming to you here from our Newport Beach office studio this week. |
| 0:26.0 | I'll be here all week. |
| 0:29.7 | And I had a bit of a down day, really, in markets. |
| 0:33.4 | We ended up coming off of the lows right into the close. But we closed down 524 points on the Dow. |
| 0:38.0 | The 10-year was up 14-15 basis points, closed at 432. |
| 0:43.7 | So rise in yields across the curve and a sell-off in stocks, |
| 0:48.9 | and the reason was that CPI numbers came out today. |
| 0:53.5 | According to the news, they were just far hotter than normal and big spike and yields and |
| 1:00.1 | this sort of Armageddon kind of scenario with what the number was, which was an entire |
| 1:05.2 | one-tenth of a percent higher than expected. |
| 1:09.7 | So we got core, I'm sorry, headline come in at 0.3 versus 0.2 expected, which year over year was 3.1 |
| 1:18.0 | versus 2.9. |
| 1:19.9 | Okay, so a 10th higher. |
| 1:21.7 | Then we had Core, which strips out food and energy, of course, also come in a tenth higher. |
| 1:28.1 | It was at 0.4 for the month of January versus a 0.3. |
| 1:32.7 | Year over year, we're at 3.9 versus what was expected at 3.7. |
| 1:38.2 | So, yeah, tough day in markets. |
| 1:41.3 | Sell off, I think there was a lot of people positioned for inflation to come down |
| 1:45.7 | and, you know, secretly hoping for a number to come down. And all I'll say is that we're making |
| 1:53.6 | big progress with inflation. It is moving lower. We have disinflation. Okay. So the rate of inflation is |
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