The Dividend Cafe Tuesday - June 11, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 11 June 2024
⏱️ 4 minutes
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Summary
Dividend Cafe: June 11 Market Commentary and Economic Update
In this episode of Dividend Cafe, we cover the market's performance on June 11th, noting that despite a slight overall decline, the S&P 500 and NASDAQ posted gains, while Treasury yields fell due to a strong auction of two-year notes.
We also discuss the uptick in the Small Business Optimism Index, reflecting ongoing economic concerns such as interest rates and potential policy changes. Key upcoming events include a core CPI number and the Federal Reserve's interest rate decision.
00:00 Introduction to Dividend Cafe 00:16 Market Overview and Performance 00:44 Treasury Auction and Interest Rates 01:09 Small Business Optimism Index 02:04 Upcoming Economic Data
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.8 | Welcome the Dividend Cafe. It is Tuesday, June the 11th with you here today. And generally a positive day in markets, it actually closed |
| 0:22.3 | a little lower, about a third of a percent, down 120 points. But both the S&P and the NASDAQ were up. |
| 0:29.0 | S&P was up.27, NASDAQ up.88. So a decent day in markets and actually a follow-through |
| 0:34.3 | in bonds today as well with some bonds rallying also. The 10-year yield closed it |
| 0:39.9 | 439, which was down seven basis points on the day. And the reason was a very strong two-year auction. |
| 0:47.1 | We auctioned off about $39 billion of two-year notes that had a bid-to-cover ratio the best in |
| 0:52.9 | about a year and sent interest rates lower a little bit on the day. And for a treasury that had a bid-to-cover ratio the best in about a year and sent interest rates lower a little bit |
| 0:55.8 | on the day. And for a treasury that has a pretty large supply issue coming to market to fund |
| 1:01.9 | deficits, it's always welcome when they're able to sell and move them at lower interest rates. |
| 1:06.7 | So those are all good things for the day. There was a small business optimism index. |
| 1:12.8 | It's NFIB that was out ticked up 0.8% to over 90, which was technically the strongest of the year, |
| 1:20.5 | although technically this is still the consecutive month of that optimism index below the historical average. |
| 1:29.2 | And there's a lot of reasons for that. |
| 1:33.8 | A lot of it is just interest rates going from zero to five percent. That affects small businesses, |
| 1:39.0 | ability to borrow money at competitive interest rates and fund their businesses. Of course, |
| 1:43.3 | we know employment is strong and things like this. And generally, the economy is strong as well. |
| 1:44.9 | Really, we're talking about some of the unknowns, what the Fed will do, when will they cut rates, their own funding mechanism and |
| 1:49.9 | interest rate expense in these higher interest rates, and then potentially things like policy change, |
| 1:55.6 | if there's a new administration at the end of the year. All those things get baked into that |
| 1:59.2 | optimism survey. And it is just that. It's a |
| 2:01.6 | survey. So read into it as you will. Tomorrow we have more data. We've got a core number on CPI. We have |
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