The DC Today - Wednesday, November 1, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 1 November 2023
⏱️ 11 minutes
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Summary
Today's Post - https://bahnsen.co/3tYWGgn
So the market closed the month of October down -1.35% in the Dow, down -2.2% in the S&P, and -3.4% in the Nasdaq. Let’s just say those numbers got a lot better the last two days, though. And then today was noteworthy as well …
Fed Day is the best day, and today the Fed kept rates where they were, as expected. The market was up +100 when Powell began talking, it went up to +200, then gave that back, then went up +250, and closed just a tad below that level. More importantly, bonds rallied viciously – with each maturity from two to ten years on the treasury curve seeing yields drop over 10 basis points.
His only comments about quantitative tightening were that they were not, at this time, considering slowing down or ceasing their “run-off” of the balance sheet. The word “run-off” is key because they are not actively selling bonds – they are letting about $80 billion of bonds mature per month and not reinvesting the proceeds. This is a form of tightening, but less aggressive than some have suggested.
Bottom line – Powell was pretty clear that they know financial conditions are, themselves, doing their work for them, and while he skirted around QT it is hard to see how anyone could hear what he said today and conclude any additional rate hikes are coming.
As mentioned yesterday the rally on Monday saw 2.5 advancers for every 1 decliner, and yesterday it repeated at 2.3 to 1. A year ago when the market bottomed and a nine-month rally began the breadth of the rally was consistently above 5-to-1 and sometimes well above 10-to-1. Market participation is still too thin to feel good about things.
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. |
| 0:14.0 | Well, hello, and welcome to the Wednesday edition of the DC today. It is Wednesday, November the 1st. We are out of the month of October. |
| 0:23.0 | We're in the final two-month home stretch of 2023. And today was Fed Day. So a lot of things I want |
| 0:30.4 | to cover today. I'm going to get right into it. The market was down in the month of October for the |
| 0:34.7 | third month in a row. The Dow was only down 1.3%. The S&P was down 2.2, |
| 0:42.3 | and the NASDAQ was down 3.4. So you basically just had a little bit of escalating downside by |
| 0:50.2 | index relative to the risk curve. And by the way, those numbers got a lot better in the final two days of the month. |
| 0:58.7 | Monday and Tuesday of this week saw a pretty nice market rally. |
| 1:02.5 | I believe in the Dow, it was about 650 points alone. |
| 1:06.7 | So those percentages had been a lot worse coming into this last weekend, but technically on the |
| 1:13.7 | month ended up looking a little better. |
| 1:15.6 | So today, the market rallied as well. |
| 1:18.5 | And it's a little interesting. |
| 1:19.7 | The market had been up about 100 points before Chairman Powell came out to speak. |
| 1:24.5 | They announced at 2 o'clock Eastern that they were not touching rates this |
| 1:31.1 | time, which was 100% probability already. And nothing really was going on. And then the press |
| 1:37.2 | conference began. Market went up a little higher at first when he first started talking. And then |
| 1:41.9 | it gave back the lead and then rallied up |
| 1:45.2 | 250 points and I listened to the entire presser there there and this has been I don't know |
| 1:51.3 | 12 meetings in a row now there's always a lot of volatility right before during and after |
| 1:57.3 | the press conference and I've always said I'm I'm very confident that that's just traders unwinding positions. |
| 2:04.9 | I don't really know what traders would have had, what kind of idiocy lined up on this one. |
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