The DC Today - Tuesday, July 18, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 18 July 2023
⏱️ 8 minutes
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Summary
Today's Post - https://bahnsen.co/3DhRwgD
After crickets last night in futures, we opened up nicely on the day right out of the gate and continued to trade higher in both stocks and bonds throughout the entire session closing just off the highs. For all those waiting for the data or news indicating some recession shoe to drop we just aren’t seeing it and flows are quietly but steadily moving more towards risk assets with short positions covering. Its still early innings in earnings season with only about 9% of companies reporting so far, but with the majority of the largest banks out and beating expectations, a common theme: resiliency in the US consumer offsetting the negative affect of yield curve inversion on net interest margins. Also of note, high yield bond spreads are at the lowest level in over a year at 380 wide, a full 100bps lower than they were at the start of the last recession in comparison.
So there you have it, markets remain resilient, and are now up 27% from the October lows, and we continue to climb this wall of worry in another heavily doubted equity bull market. Check out the podcast video today for more color on my resiliency theme and more.
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. |
| 0:15.1 | Hello and welcome to today's edition of DC Today. Brian Saitel here with you today and what was basically an |
| 0:23.8 | upday the entire day. So some good news to report. Futures last night were flat. Not much going on, |
| 0:31.6 | really. And so I wasn't expecting this coming into the market today. But we had a nice day. We closed up 366 points on the Dow. |
| 0:40.2 | Bonds rallied a little too. Rates were lower pretty much across the curve. Tenure was down a |
| 0:44.6 | basis point on the day, but still in that sort of 379, 375, 379 range, which is, which is good. |
| 0:52.0 | There was retail sales was the largest economic data point out on the day. |
| 0:57.8 | It was actually lower than expected. We got a 0.2% increase for the month of June versus a 0.6%, which is |
| 1:05.3 | what was expected. So quite a bit lower on consumer spending and retail sales. May, though, was revised up about 15 minutes later |
| 1:14.0 | from 0.3 to 0.5. Markets actually rallied after the news. It's just sort of porridge is just right |
| 1:21.0 | type of thing, at least on the consumer, which is the strength in the economy. Still spending, |
| 1:26.1 | still expanding, but maybe at a little slower pace, |
| 1:28.8 | which gives more of the narrative to this sort of soft landing camp, that they've been able to raise |
| 1:32.9 | rates and not have the economy fall out of bed. And not only not fall out of bed, but the economy |
| 1:39.6 | is hanging in there. And I think as more time goes on, you're just sort of seeing that, you know, this |
| 1:45.9 | recession shoot a drop just isn't, isn't happening. You've got markets that have moved higher |
| 1:51.9 | were now 27 percent, at least on the S&P or 27 percent off of the low in October, which is a big |
| 1:58.4 | move. And it's handily into bull market territory, at least on stocks. |
| 2:03.6 | I could argue that, you know, a lot of that move has been with 10 to the largest technology |
| 2:08.8 | companies driving most of it, but you can't deny what it is, is that markets have moved higher |
| 2:13.7 | and people are feeling better about interest rates starting to peek out a little bit. |
| 2:17.9 | And we saw more of that today. One of the effects of having interest rates come down, |
... |
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