The DC Today - Wednesday, January 24, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 24 January 2024
⏱️ 6 minutes
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Summary
Today's Post - https://bahnsen.co/48MsRiD
We experienced positive market sentiment throughout the morning until approximately 10:30 AM, driven by better-than-expected PMI data in both services and manufacturing. It’s noteworthy that typically, indications of economic expansion don’t lead to a decline in stocks. However, despite four days of gains on the Dow, the news of improving economic data led to a loss of some early morning momentum. This occurred on a day of relatively uneventful trading as interest rates edged slightly higher.
One key metric closely monitored by the Federal Reserve, The Taylor Rule, suggests that the Fed Funds Rate should currently be approximately 1% lower at 4.5%. Looking ahead, futures indicate a balanced probability for a rate cut in March. However, there is a significant amount of economic data expected between now and then that could influence this outlook. As previously mentioned, it wouldn’t be surprising if there were more discussions in March about the conclusion of Quantitative Tightening (QT), potentially easing financial conditions and essentially resembling a rate cut.
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 D.C. today. It is Wednesday afternoon here on the 24th of January. |
| 0:21.4 | And the first month of the year is definitely flying by here. |
| 0:25.2 | Pretty quiet day of trading, benign. |
| 0:27.5 | You know, we had earlier gains this morning sort of give way and lose a little momentum. |
| 0:32.1 | Kind of late morning, 1030-ish, something like that. |
| 0:34.9 | We had some PMI data that came out actually better than expected. |
| 0:39.4 | And we had interest rates move up a few basis points, call it four basis points on the 10-year. |
| 0:44.0 | We closed the 10-year around 418. And the Dow, which had been up earlier, ended up down about 99 points in percentage terms. |
| 0:52.5 | It's, you know, super small. 0.26%. |
| 0:56.0 | NASDAQ and S&P actually did notch a small eeked out, a small gain on the day. So that's the fifth day in the row for those indices, which is positive, but fairly quiet day on in trading. |
| 1:07.0 | And like I said, we had economic data come out in PMIs, and both services and |
| 1:12.6 | manufacturing were expanding. The numbers came out on services of 52.9 versus 51, which was a little |
| 1:21.4 | bit better than expected, but services has actually been above 50, meaning expanding for quite some |
| 1:25.7 | time. Manufacturing, however, has been contracting |
| 1:29.0 | now for 14 months, which is the longest period in history, the longest non-recessionary |
| 1:34.8 | period in history outside of what was the same number or the same number of months in 1951. |
| 1:41.6 | So we've had this sort of contractionary manufacturing data. We've written about it a little bit, |
| 1:46.0 | but our expectation is that the evolution of near-shoring and on-sharing would bring some of that back. |
| 1:52.5 | And you saw it today in the number. Hard to attribute it to just that one component, of course, |
| 1:57.7 | but we were above 50 at 50.3 versus a 47.8 expectation. So a decent number there. And of course, but we were above 50 at 50.3 versus a 47.8 expectation. |
| 2:02.9 | So a decent number there. And of course, sometimes good news and it ends up being bad news in |
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