The Dividend Cafe Wednesday - December 11, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 11 December 2024
⏱️ 6 minutes
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Summary
Market Updates and Inflation Insights - December 11th Edition
In this episode of Dividend Cafe, Brian Szytel provides an overview of the market's performance on December 11th, highlighting the overall positive day with specific gains in the S&P and Nasdaq, despite a minor drop in the Dow. The core discussion centers around new CPI data indicating a consistent inflation rate, with headline CPI at 2.7% and core CPI at 3.3%, still above the Fed's 2% target. Szytel explains the impact of shelter costs on these figures and the anticipated future convergence that may align with Fed targets. Additionally, he discusses the upcoming FOMC meeting with a likely 25 basis point rate cut and the speculation about future rate cuts in the coming year. He also offers insights on inflation-protected treasuries, advising they may be a safe investment but without significant upside in the current climate.
00:00 Introduction and Market Overview
00:25 Inflation Insights and CPI Data
01:44 Economic Growth and Spending Trends
02:30 Upcoming FOMC Meeting and Rate Cuts
03:23 Inflation Protected Treasuries Discussion
04:10 Conclusion and Viewer Engagement
Links mentioned in this episode: DividendCafe.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. |
| 0:10.0 | Welcome to Dividend Cafe. This is Wednesday, December the 11th. Brian Taitel with you here on what was generally a positive day overall in the market. |
| 0:23.4 | The Dow actually did close lower by about 100 points, little less, but the S&P was up eight-tenths |
| 0:28.9 | of a percent. |
| 0:29.9 | The NASDAQ was a considerable 1.77 percent. |
| 0:33.2 | So it was a bigger rally in technology names. |
| 0:35.4 | Skewing those numbers, you did have the 10-year-up-4-bases |
| 0:38.2 | points, so we closed at 427. And all of this was really around the bigger news, which happened to be |
| 0:44.7 | inflation. So we got a fresh read on CPI. Both headline and core came in right in line with |
| 0:50.6 | consensus. We got 0.3% for the month of November. That's right what was expected. |
| 0:56.3 | That puts headline at 2.7% year over year. And if you strip out food and energy, it puts |
| 1:02.8 | core at 3.3% year over year. So still elevated above a 2% threshold that the Fed wants to see, |
| 1:10.0 | but it has been frankly pretty |
| 1:11.7 | steady. So I think that the market got what it was looking for today overall. And I've said this a few |
| 1:17.5 | times, but inside of that number, there's a shelter component that makes up a big portion of it. |
| 1:23.6 | It's almost 40% of what goes in that number. And the calculation is a year-over-year |
| 1:28.6 | figure. And so it's still capturing some elevated inflation levels from a year ago. Whereas if you |
| 1:33.8 | look at the six-month-Zillow rent index, it's much lower by about a point and a half lower. |
| 1:40.1 | So that matters. So those two numbers converging, what is being calculated inside of CPI and what actually is, which is rent in cost of living going up or down. There's still a disparity there that as it converges, I believe, will get us back towards our 2% target. But that said, this isn't just shelter. The numbers are what they are because the economy is growing. |
| 2:02.1 | People have jobs. There's roughly 4% wage growth right now. And so people are spending, |
| 2:07.4 | obviously, coincidentally, it's the holiday season. So people are spending more than they |
| 2:12.2 | normally do or more than they should. But that's what's happening right now and it's all flowing |
... |
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