Thursday - April 17, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 17 April 2025
⏱️ 5 minutes
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Summary
Links mentioned in this episode: DividendCafe.com
Market Recap: UnitedHealthcare’s Impact on the DOW | Dividend Cafe Thursday
In this episode of Dividend Cafe Weekly, David Bahnsen provides a detailed market recap, focusing on the significant influence of UnitedHealthcare's stock drop on the DOW. Despite the DOW's 500-point decline, Bahnsen explains that the market was essentially flat, with other indices like the S&P 500 and NASDAQ experiencing minimal changes. He also defends the DOW as a better broad-based market indicator compared to the S&P, highlighting the distortive nature of price-weighted and market cap-weighted indices. Additionally, he mentions the bond market's slight movement and the early closure of financial markets for Good Friday. The episode concludes with a reminder about the forthcoming Dividend Cafe update and a note on investment risk disclosures.
00:00 Introduction to Dividend Cafe 00:31 Market Recap: S&P, NASDAQ, and DOW 00:49 Understanding the DOW's Performance 02:29 Bond Market Update 02:47 Closing Remarks and Upcoming Content 03:14 Disclaimer and Legal Information
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:13.0 | Hello, and welcome to Daily Blurb. It's David Bonson. My voice probably doesn't sound like Brian Saitel. I don't get to do a lot of these Tuesday, Wednesday, Thursday, podcast anymore because my very capable partner, Brian Seitel, mostly does those. |
| 0:26.1 | But Brian's traveling today. So I want to give you the quick daily recap and then make a point |
| 0:30.8 | about something. The S&P was up a tiny bit, a little above zero. The NASDAQ was down a tiny bit, a little |
| 0:36.2 | below zero. But at first glance, |
| 0:38.5 | the Dow was down over 500 points. And you go, oh, no, another bad day in markets. But then you |
| 0:44.9 | see that in actuality, more or less, not all, but about 85% of the Dow's downside came from one company. |
| 0:57.5 | There's a link to it in our Daily Board today. |
| 1:00.7 | United Healthcare just happened to have been almost $600 stock that was down over $130 today, 22%. |
| 1:07.6 | So when you have one big company down a lot in one day, the Dow is what's called a price-weighted |
| 1:14.2 | index. |
| 1:15.3 | So the price of the stocks is how big of a representation in the index they are. |
| 1:21.9 | So United Healthcare is a big, high-price stock dropped a lot. |
| 1:25.5 | So it just has this huge disproportionate effect when in reality, |
| 1:29.8 | 23 or something like that of the 30 Dow companies were up today, but because of United |
| 1:35.5 | Healthcare, it made the whole Dow look down and what was basically a flat day in markets, |
| 1:40.2 | S&P up 13 basis points, NASDAQ down 13 basis points. |
| 1:50.6 | I am extremely defensive of the Dow is a far better index than the S&P because of the market cap-weighted nature of the S&P, where the stocks are weighted according to their capitalization, |
| 1:55.6 | it ends up putting this huge top heaviness on a couple mega-cap tech companies and the tech sector at large. |
| 2:02.8 | And yet on a daylight today, it really is highly distortive the way the Dow is set up. |
| 2:09.2 | I think over time, it levels out and evens out that the Dow has just been a far better |
| 2:16.0 | indicator of the broad-based nature of the American market |
... |
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