Thursday - March 13, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 13 March 2025
⏱️ 8 minutes
🧾️ Download transcript
Summary
Navigating Market Volatility and Economic Fundamentals
In this episode of Dividend Cafe, Brian Szytel discusses the ongoing market volatility and significant drawdowns, with the Dow closing down 537 points and other major indices also experiencing declines. Despite a better-than-expected Producer Price Index (PPI) report, market concerns have shifted to foreign policy, fiscal policy, trade, and tariffs. Brian explores whether these fluctuations could lead to a recession, noting the continuing strength in employment and resilient economic fundamentals. He also examines the impact of tariffs, particularly compared to the first Trump presidency, and advises listeners to focus on long-term goals rather than daily market movements. Closing thoughts emphasize the benefits of buying shares at lower prices during market corrections and maintaining a long-term investment perspective.
00:00 Introduction and Market Overview 00:30 Economic Indicators and Market Reactions 01:39 Interest Rates and Housing Market 02:37 Impact of Tariffs and Trade Policies 04:12 Market Corrections and Investment Advice 05:33 Final Thoughts and Client 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. |
| 0:13.0 | Welcome to Dividend Cafe this Thursday, March 13th. |
| 0:17.0 | Once again, Brian Saitel with you here in West Palm Beach, TPG office on this unfortunate |
| 0:24.1 | drawdown day in markets, so the volatility here continues. |
| 0:28.4 | We had the Dow closed down about 537 points. |
| 0:32.3 | We didn't close at the lows for the day, but we're pretty close to that. |
| 0:36.3 | And the S&P closed down about 1.39%, NASDAQ was down almost 2%. |
| 0:41.3 | So the ongoing volatility persists. And today we actually had better than expected read on producer price index. So these are the PPI numbers, wholesale inventory, input numbers. They were better than expected by two-tenths on |
| 0:55.4 | headline and three-tenths on core. So typically, that has led to positive markets rather than |
| 1:00.7 | negative, especially after yesterday's CPI number that was also better than expected. And the reason |
| 1:07.5 | is that the shift really in this market narrative is away from both employment, |
| 1:12.1 | and it's away from inflation, and it's just solely focused on volatility around foreign policy |
| 1:18.4 | and fiscal policy and trade and tariffs. So that's the reality that we're in. All that to say, |
| 1:24.2 | and I think this is an important point, because the question that I get the most, |
| 1:28.1 | is this turning into a recession, or is it some sort of lasting drawdown and larger thing we |
| 1:34.0 | need to worry about? And frankly, anything can turn into that. You can't discredit that from |
| 1:39.4 | happening, but two things. One, fundamentals are still sound, so the economy is still doing positive things. That's good. The employment is still resilient, and we have full employment with unemployment low. Those things are good. The interest rate paradigm is moving lower. In fact, now there is three interest rate costs priced in for 2025. And it's going to get us closer to that terminal Fed funds |
| 2:02.4 | rate that I've spoken about a lot, which is essentially somewhere near 1% over inflation. So if you |
| 2:07.5 | think inflation will be two and a half, a three and a half percent fed funds probably does enough |
| 2:13.1 | to alleviate some debt overhang and refinancing, which is a risk, and it probably does enough |
| 2:19.1 | to get mortgage rates down to a level in which people can start to move around the country again, |
| 2:23.8 | and it should unfree some of the housing market. Lower inflation numbers and then concern around |
... |
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