Tuesday - January 7, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 7 January 2025
⏱️ 7 minutes
🧾️ Download transcript
Summary
Market Overview and Yield Curve Insights - January 7th, 2025
In this episode of Dividend Cafe, Brian Szytel provides an analysis of the market movements on January 7th, 2025. He discusses the day's overall market decline with the Dow, S&P, and NASDAQ all down, especially in technology sectors. Szytel highlights a positive shift in the yield curve, indicating economic stability, and mentions higher than expected job openings along with a balanced labor market. He also addresses a viewer's question about the importance of dividends, emphasizing that while dividends are a sign of good corporate stewardship and management, other factors should also be considered. The episode concludes with encouragement to reach out with questions and a promise to return the next day.
00:00 Welcome Back to Dividend Cafe
00:23 Market Performance Overview
00:53 Economic Indicators and Yield Curve Analysis
02:18 Job Market and Labor Trends
03:03 Services Report and Interest Rates
03:29 The Importance of Dividends
04:39 Closing Remarks and Upcoming Updates
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 Tuesday, January the 7th. |
| 0:17.0 | Brian Saitel with you here today, and it's good to be back with you after what was a week |
| 0:22.3 | or so with not the recording here on Dividend Cafe. I missed it. But I hope you all had a wonderful |
| 0:27.7 | Christmas and holiday season and a great new year and are off to a good start here in 2025. |
| 0:34.3 | So with that, let's take a look at today. We had markets down overall on the day. The Dow was down about four-tenths of a percent. The SMP was down a little over 1 percent. The NASDAQ was down almost 2 percent. So a much more larger sell-off in the growth areas of the market and technically more of the technology space overall in market. So almost the polar |
| 0:55.7 | opposite of yesterday. Technology outperformed and staples underperformed today. More of those |
| 1:01.3 | defensive sectors did better and some of the higher valuation areas of the market sold off. |
| 1:06.3 | On the economic side, you actually had the 10-year yield up six bases points. |
| 1:11.9 | We closed at 468, so the 10-year yield continues to creep higher. |
| 1:16.4 | The 210 spread, by the way, the yield curve at about almost 40 basis points, not quite, it's |
| 1:22.0 | about 39 basis points. |
| 1:24.2 | That's technically the steepest yield curve that we've had in over two years. If you look back, I mean, we went inverted on the yield curve right around the 4th of July of 2022, and we more or less stayed inverted, meaning that the short end was a higher rate than the long end, all the way through September of last year. So over two years of inverted yield curve. |
| 1:46.3 | So now at almost 40 basis points positive, meaning 10 year yields are higher than two years by about |
| 1:52.0 | 40 bibs. If you take that back, it's all the way early of 2022 when you get a yield curve |
| 1:58.0 | that that was that steep. It's actually a positive sign for the economy. |
| 2:01.3 | That's a normal relationship, albeit a small one. |
| 2:04.6 | The spread is pretty small. |
| 2:06.2 | But it makes sense to have a higher borrowing cost the longer you go out in maturity. |
| 2:10.7 | So that's a positive thing. |
| 2:12.3 | It means that good things are happening in the economy. |
| 2:14.7 | Things are functioning fairly normally. |
... |
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