The Dividend Cafe Wednesday - July 31, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 31 July 2024
⏱️ 5 minutes
🧾️ Download transcript
Summary
FOMC Meeting Updates and Market Rally on July 31st
In this episode of Dividend Cafe, Brian Szytel from Newport Beach discusses the positive market response on July 31st, highlighting gains across various sectors following the FOMC meeting. Although the Federal Reserve kept interest rates unchanged at 5.25-5.5%, their balanced view on the risks to the economy, including a weakening employment market and declining inflation, boosted market confidence. Additionally, the episode covers the impact of the lower-than-expected ADP private payroll numbers and employer cost index on the market rally. The discussion also touches on putting money to work in the current market, upcoming initial jobless claims, and manufacturing data, as well as the anticipated employment report.
00:00 Introduction and Market Overview
00:20 FOMC Meeting Insights
01:14 Market Reactions and Rally
01:36 Economic Data and Fed Narrative
01:59 Investment Strategy and Upcoming Data
02:30 Conclusion and Sign Off
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. |
| 0:13.0 | Welcome the Dividend Cafe this Wednesday, the last day of July, July 31st, Brian Saitel with you here from our Newport Beach office. And what was a |
| 0:22.7 | nice day really in markets across the board, the morning opened up. So the markets were up on the |
| 0:27.6 | day to start, and then they built on those gains around the FOMC meeting ending today. And while |
| 0:33.8 | their left rates unchanged at five and a quarter to five5.5. They definitely had some change in language |
| 0:41.0 | with a much more balanced picture around the risks to the economy between a weakening |
| 0:46.2 | employment market and a declining inflation paradigm that they've been working on. So more confidence |
| 0:52.0 | that they've gotten inflation in where it needs to go, |
| 0:55.0 | or at least in that path. They didn't go so far as to say, and by the way, in September, |
| 0:59.2 | will definitely raise rates because, of course, that would be silly. There's too much data from now |
| 1:03.3 | until then to come out. But that's what was read in markets. And there's about a 93% chance in |
| 1:09.8 | Fed Fund's futures that September will be |
| 1:12.4 | the starting point of the next phase in this cycle. They've been tightening for, they started |
| 1:19.3 | almost two years ago. And so it's taken a while to get employment to come into balance and to get |
| 1:25.5 | inflation to move to where it needs to be. |
| 1:28.0 | And now that we're just about there, markets were up nicely on the day. We had a big rally |
| 1:32.4 | today across the board in risk assets. Recovery too in the NASDAQ that it had been weak here |
| 1:37.4 | for some time. So across the board, things were up nicely. The tenure was down, seven basis points |
| 1:43.8 | on the day. So bonds were up, too. |
| 1:46.2 | So all in all, markets like the Dubbish comments, and there you have it. We got, there was an |
| 1:50.6 | ADP number out today that I think supported some of this as well. It was a private payroll number |
| 1:55.1 | that was weaker than expected at 122 versus 150,000 expected. And then inside of that, the employer cost index was also a little bit |
... |
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