The DC Today - Wednesday, July 5, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 5 July 2023
⏱️ 7 minutes
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Summary
Today's Post -https://bahnsen.co/3ricXf2
I am hopeful all had a wonderful Independence Day spent with family and friends in celebration of the 247th year of the greatest country to ever inhabit the Earth. The biggest news on the day was the Fed minutes that were released, indicating the rationale behind their decision to pause and hold rates steady last meeting while leaving the door open to raising again in the near future. While the decision was unanimous, the discussion revealed a debate by some on moving rates up 25 bps last week. The next FOMC meeting is out on 7/25 and 7/26, and while we do get some employment data this week, I think it will be less relevant than the consumer price data we will get a week from today that will ultimately drive their next decision on rates. It does appear the Fed is erring on the risk of recession over the risk of having to repeat the 1970s style stop and go on Fed policy. All said, it was a low-volume trading day following the holiday and the first full trading day in the second half of the year that was modestly negative in stock and bond prices throughout. All discussed and more in today's video podcast link below.
Brian Szytel
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. |
| 0:14.3 | Well, hello and welcome to D.C. today. It's a day after 4th of July, July the 5th on Wednesday. And I hope everyone had a |
| 0:23.7 | great independence day with family and friends and got to celebrate the 247th year of this |
| 0:30.5 | great country. So today was as expected following the holiday. It was a little quiet in |
| 0:35.6 | markets. So volume was low. We were down something |
| 0:38.3 | like about 129 points on the day on the Dow. And the big news on the day was the Fed Minutes that were |
| 0:45.2 | released and I'll sort of go through that a little bit. Interest rates were a little higher on the day. |
| 0:50.1 | The 10 years sort of inching its way towards that 4% figure. We'll see if it gets there. We're at something like 393 as of today. So we're up seven basis points on the day. Two-year yields were higher too. And again, mostly because of the Fed minutes that were released. So the meeting they had a week and a half ago, or yeah, but a week and a half ago, release the minutes. You know, they obviously didn't raise |
| 1:10.9 | rates. They paused. The minutes showed that while the vote was unanimous, meaning that everybody |
| 1:17.4 | voted to go ahead and not do anything in the last meeting, the debate back and forth was |
| 1:22.1 | definitely with several of the constituents talking about, or Fed presidents talking about |
| 1:27.1 | potentially raising 25 basis points. So I do think the Fed talking about, or Fed presidents talking about potentially raised in 25 basis points. |
| 1:28.9 | So I do think the Fed is basically risking the potential recession or a potential recession at this point more than it is, you know, wanting to risk what happened in the 70s, which is they sort of declared victory on inflation and then had to kind of reinvigorate a rate tightening campaign after they |
| 1:44.6 | had stopped officially. |
| 1:46.1 | So I don't think they want to do that. |
| 1:47.7 | The next meeting is the 25th and 26th of July. |
| 1:51.9 | So that's a good amount of time from now. |
| 1:53.6 | Call it three weeks or more. |
| 1:55.2 | There's a couple of data points that will come out. |
| 1:57.5 | This week, actually, we've got some employment data. |
| 1:59.7 | We'll get the ADP payroll number |
| 2:01.0 | tomorrow and then jobless claims and some more data on Friday. So that'll be something that can |
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