The Dividend Cafe Wednesday - December 18, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 18 December 2024
⏱️ 7 minutes
🧾️ Download transcript
Summary
Market Reactions and Real Estate Insights: December 18 Analysis
In this episode of Dividend Cafe, Brian Szytel discusses the market downturn on December 18 from the New York City office. He provides an overview of the two-day Fed meeting, which resulted in a 25 basis point cut in interest rates to a range of 4.25% to 4.5%. The market reaction was majorly influenced by the revised dot plots and press conference, leading to a significant selloff, particularly in the Dow, S&P 500, and Nasdaq, as interest rates shifted higher. Additionally, Brian touches upon real estate market trends, noting a decline in housing starts and a rise in new permits, and offers insights into handling real estate investments. He assures listeners that despite market volatility, the fundamentals of well-allocated investment portfolios remain sound.
00:00 Introduction and Market Overview
00:14 Federal Reserve Meeting Insights
00:33 Market Reactions and Analysis
02:15 Investment Strategies and Portfolio Advice
03:11 Real Estate Market Discussion
04:13 Economic Indicators and Housing Data
04:48 Conclusion and Next Steps
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 18th. |
| 0:17.0 | Brian Saito with you in our New York City office today in the heart of Manhattan. On what |
| 0:22.6 | ended up turning up to be quite a down day actually overall in stocks and bonds, we concluded |
| 0:28.1 | our two-day Fed meeting and set interest rate policy, or Powell did 25 basis points lower |
| 0:35.2 | to a range of four and a quarter to four and a half on Fed funds. That was completely expected. It was a range of 4.5 to 4.5 on Fed funds. |
| 0:38.3 | That was completely expected. |
| 0:40.3 | It was a unanimous decision. There was one dissenter only who wanted to hold rates the same. |
| 0:45.3 | But what moved markets, and frankly more towards the end of the day, was the dot plots and then the press conference. |
| 0:52.3 | So I mentioned this yesterday, but there was four |
| 0:54.8 | additional rate cuts expected for 2025, and that was moved lower to just two. There was |
| 1:01.3 | consideration for it maybe moving to three, but I don't know that there was a lot suggesting |
| 1:06.1 | that only 50 basis points more would come over the course of the next 12 months. |
| 1:11.3 | That's what disappointed markets. |
| 1:13.4 | And the reasons that they're slowing things down are all, frankly, good rather than bad. |
| 1:18.9 | So that's not necessarily what caused the sell-off in the Dow. |
| 1:22.7 | The Dow was down 1,123 points on the day. |
| 1:26.3 | So that's a 2.5% move. |
| 1:28.3 | S&P was down almost 3%, and the NASDAQ was down 3.5. |
| 1:32.3 | Rates went up across the curve. You had the 10-year up 11 basis points on the day. |
| 1:37.3 | The two-year, by the way, was up 14 basis points. So rates moved considerably higher, more so on the short end of the curve because the Fed basically suggested that they're going to cut rates less. We knew that was going to |
| 1:49.1 | happen, the extent of which I think was a little bit more than markets had priced in. And so |
... |
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