Wednesday - January 15, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 15 January 2025
⏱️ 7 minutes
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Summary
Market Surge: Analyzing a Strong Day in Equities and Bonds
In this episode of Dividend Cafe, Brian Szytel reports from West Palm Beach, Florida, on January 15th. He highlights a significant uptick in the equity markets, with The Dow, S&P, and Nasdaq seeing notable gains. The bond market also experienced a rally, with a drop in the 10-year yield. Szytel analyzes the factors behind these movements, including better-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) numbers, and offers insights into the impact of these inflation indicators on market behavior. Additionally, he discusses the Empire State Manufacturing Index, the Fed's Beige Book, and the positive results from big banks' trading revenues. Szytel also addresses a viewer's question about the potential for 10-year yields to surpass 5%, emphasizing the importance of fixed income investments in portfolios amid fluctuating interest rates.
00:00 Introduction and Market Overview
00:36 Inflation and Economic Indicators
01:48 Empire State Manufacturing Index and Beige Book Insights
02:49 Q&A: Interest Rates and Treasury Yields
05:09 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 Wednesday, January the 15th. Brian Saitel with you from our West Palm Beach, Florida office. |
| 0:20.0 | On a very nice update in equity markets |
| 0:22.8 | and a rally in the bond market for that matter. We had the Dow was up 703 points on the day. That's 1.65%. The S&P was up 107 points. That's 1.8%. |
| 0:35.2 | And the NASDAQ was up 466, which is almost 2.5%. So big move up in equities. |
| 0:42.0 | Bond yields dropped significantly. We had the 10-year down 13 basis points on the day. We closed at 465. |
| 0:49.1 | So what caused all this? Yesterday, I spoke about the producer price index being cooler than expected, and that |
| 0:56.7 | can be at times a precursor just because it's the input. It's the wholesale input side of |
| 1:01.5 | inflation on wholesale pricing. Today we saw the consumer price index, CPI, better than expected, |
| 1:09.0 | meaning lower, at least on core. |
| 1:11.0 | On headline, we had a 0.4% move for the month, but a lot of that was driven by food and |
| 1:17.8 | energy. |
| 1:18.3 | So when you stripped out food and energy, you got down to a 0.2% number on core, and that |
| 1:24.9 | was better than expected. |
| 1:26.2 | And so year over year on headline is sitting at 2.9 |
| 1:29.9 | year over year on core sitting at 3.2 and that was just below what was expected which was 3.3. |
| 1:37.7 | So do I think that market should have moved lower on the payroll report on Friday and you |
| 1:43.5 | know and then did what they did |
| 1:45.0 | today on some of this news. I don't. But, you know, markets are sensitive to these things and, you know, |
| 1:51.2 | can move more than people give them credit for in most cases. So a little cooler on the inflation |
| 1:56.5 | front for the day in the market and a positive day overall. We also had the Empire State |
| 2:02.3 | Manufacturing Index that was meaningfully weaker than expected. It was a negative 12 versus a |
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