The DC Today - Tuesday, October 10, 2023

The Dividend Cafe

The Dividend Cafe - The Bahnsen Group

Monetary Policy, Dividend Growth Investing, Investing, Wealth Management, Estate Planning, Retirement Planning, Business, Macro Economics

4.9 • 572 Ratings

🗓️ 10 October 2023

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today's Post - https://bahnsen.co/3S0qSBs

Markets today moved higher as bond yields came lower. One can argue that bond yields are dropping in response to comments from Fed governors yesterday (see below) but the more prominent factor is likely a slight flight-to-risk out of the war situation in Gaza. What it has done, though, is exacerbate the stock-bond correlation whereby they were both dropping in September and now are both rallying.

Earnings season launched with Pepsi announcing their results before the market opened. Markets liked it.

President Biden joined with European leaders in a joint statement taking an unambiguous stance against Hamas and for Israel. He gave a speech this afternoon that conceded there are American fatalities and hostages. Congress and even the White House are not really the challenge here – a rare thing to be able to say in this day and age. The challenge for the President will be, to borrow from my favorite political commentator, Mark Halperin, “the squad, and then Harvard students.” But there also will be a real challenge for the administration to maintain their posture with Iran (it will likely be impossible), and what can be done about American hostages taken by Hamas is not going to be easy either. Add to that the complexity of getting aid for Ukraine and Israel in the next 2-3 weeks, and this is going to be a challenging time at the White House.

The death toll appears to be over 1,500 now. The reports all seem to indicate that one of the reasons Israeli intelligence picked up nothing on what Hamas was doing was that there was simply no electronic communication about it at all – none.

The Republican mess over the next Speaker of the House is as blurry, evenly divided, and unclear as it was a week ago.

Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com

Transcript

Click on a timestamp to play from that location

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.
0:13.7	Well, hello and welcome to the Tuesday edition of the DC Today. We had a fully normal day in markets, meaning stock and bond and banking
0:23.2	markets were all reopened after the Columbus Day holiday where only stock markets were
0:29.0	open. And you did see exactly what would have been predicted in the aftermath of the
0:36.5	homocitosity against Israel, which was a significant drop in bond
0:42.7	yields that rallied bond prices higher. And yet you saw stock prices rally yet again. And I think
0:51.6	we're now up 850 to 900 points from the bottom on Friday.
0:57.4	But you got about 300 points up Friday. You had about 200 yesterday. You got another 150 or so today.
1:03.4	And then there was an intraday move that accounts for the difference on Friday.
1:09.0	This is a very important thing for me to say. Generally, when you have a big event that freaks
1:15.7	people out, a war, an invasion, exigenious shock, yields drop, bond prices rally as part of a fight
1:24.1	to safety. That part is pretty easy. But of course, that is the opposite of risk
1:32.3	assets rallying. You can't get a flight to safety rally in non-risk assets because people are
1:41.3	trying to get out of risk and still have a fight, excuse me, a rally around risk.
1:47.4	And yet on a small scale, it's not huge.
1:49.8	Let's not get carried away here with the Dow up 350 points.
1:54.2	Since the Hamas attack over the weekend, could the Dow been up 200 yesterday and 150-ish today without bond yields dropping
2:05.1	today, without the action out of Israel, Hamas? Of course. It doesn't take any reason to go up
2:13.4	350 points in two days or to go down 350 and two days. However, the notion of bond yields
2:20.0	dropping today and equity is going higher, it really reinforces what has been one of our biggest
2:28.3	themes for months, which is that stocks and bonds are heavily positively correlated right now.
2:38.5	When yields drop and bonds go higher, stock prices are going higher with it.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from The Dividend Cafe - The Bahnsen Group, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of The Dividend Cafe - The Bahnsen Group and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.