Thursday - February 13, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 13 February 2025
⏱️ 7 minutes
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Summary
Analyzing Market Movements and Inflation Impact
In this episode of Dividend Cafe, Brian Szytel from West Palm Beach, Florida, discusses the market's performance on February 13th, highlighting a positive day for stocks and a significant drop in bond yields. The conversation focuses on recent inflation data, specifically the producer price index (PPI) and its effect on market behavior. Brian emphasizes the importance of observing longer-term fundamentals rather than reacting to short-term market fluctuations. He also shares his thoughts on gold as an investment, pointing out its unpredictability and lack of cash flow production. He concludes by encouraging a long-term view and inviting audience engagement with questions.
00:00 Introduction and Market Overview 00:45 Inflation and Interest Rates Analysis 02:07 Long-Term Investment Strategy 03:09 Gold Investment Insights 04:33 Conclusion and Final Thoughts
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 Thursday, February the 13th. |
| 0:18.0 | And I'm Brian Saitel here in West Palm Beach, Florida, in our office here with you |
| 0:24.5 | today on an upday overall in markets, which is nice. We've had a bit of a Wipsaw type of week with an |
| 0:29.3 | up-down, up-down deal around mainly inflation numbers that have been reported. But the Dow ended up |
| 0:35.1 | 342 points on the day. |
| 0:41.4 | The S&P was up over a percent and the NASDAQ was up a percent and a half. So good day across the board for stocks. |
| 0:44.1 | Bond market yields were down significantly. |
| 0:46.1 | So we had bonds rally and price. |
| 0:48.1 | A yield on the 10 year dropped 10 bases points. |
| 0:50.3 | We closed at 453. |
| 0:52.2 | Remember yesterday, we had intraday move quite a bit, up 15, and then closed up just eight basis points. But today, the number around what moved interest rates was a second read on inflation, which is the producer price index. This is the PPI number. And it was in line on on core, in slightly on on headline than expected. But it was the revision of |
| 1:15.1 | December that was probably the bigger needle mover within the number. And we can tell that it's a bit |
| 1:21.7 | of a nothing burger as far as what it is saying to the market because interest rates went straight |
| 1:26.8 | down. And if it was really a ramp up |
| 1:28.4 | in inflation, that would be different. You'd have a rally in yields, meaning bonds would sell off, |
| 1:34.7 | and you'd have a strengthening dollar and inflation expectations would ramp up, so on and so forth. |
| 1:39.4 | Not really what we saw. And the reason is you can extrapolate using CPI and PPI and get to the Fed's favorite metric, |
| 1:47.5 | which is PCE. I know that's a lot of acronyms, so bear with me. The personal consumption expenditure |
| 1:53.1 | index number is what the Fed likes to use the most, and you can calculate it more or less with |
| 1:59.6 | these figures, and you get to something that's also in line. |
| 2:02.6 | The worry about yesterday's bigger number and then today's slightly higher number is diffused because |
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