Wednesday - January 8, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 8 January 2025
⏱️ 5 minutes
🧾️ Download transcript
Summary
Market Recap and Fed Insights - January 8th
In this episode of Dividend Cafe, Brian Szytel provides a comprehensive market recap for January 8th. The Dow closed above fair value with a gain of 106 points, while the S&P edged slightly higher and the NASDAQ remained flat. The U.S. dollar strengthened amidst currency weakness in the UK. Fed Governor Waller discussed potential rate cuts in 2025, noting core PCE inflation was below 2% over the past year. The FOMC minutes from December indicated elevated inflation and a cautious approach to rate cuts. On the economic front, ADP private payrolls fell short of expectations, but the labor market remains strong with initial jobless claims lower than anticipated. Additionally, Waller remarked that Trump tariffs would likely have minimal impact on inflation. The episode concludes with a brief Q&A on Trump's comments about Canada, Greenland, and Panama, and a look ahead to the non-farm payroll report on Friday.
00:00 Introduction and Market Recap
00:27 Currency and Fed Policy Updates
02:03 Economic Data Insights
02:40 Q&A Session Highlights
03:14 Closing Remarks and Upcoming Events
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 8th. Brian Taitel with you here to go over our market recap. |
| 0:20.0 | We actually closed above fair value on the Dow. |
| 0:23.7 | We were up 106 points, which is a quarter of a percent. We were just above fair value on the S&P, |
| 0:29.5 | nine points, and then just below, barely, on the NASDAQ, essentially flat. So quite a choppy day |
| 0:35.5 | overall, choppy session. Dollar was up about half of a |
| 0:39.0 | percent. There has been some sterling weakness in the UK on some fiscal woes. They're dealing |
| 0:44.8 | with there and some currency weakness there. And so dollar tends to be that safe haven. There was |
| 0:51.1 | Fed Governor Waller talking more doveishly about rate policy, supportive of more rate cuts in 2025 than what the market has priced in. |
| 1:01.8 | He noted that Core PCE was below 2% for the entirety of the last 12 months, if you remove housing from it. |
| 1:08.8 | I tend to agree with him. |
| 1:10.5 | Right now, the market has only priced in |
| 1:13.2 | about 50, actually less than that, 38 basis points of additional rate cuts for 2025. I would take |
| 1:19.4 | the over on that, but we'll see what other economic data we get. The March easing Fed funds rate |
| 1:26.3 | right now, the futures are predicting still less than 50% |
| 1:29.6 | chance of a March cut. |
| 1:31.2 | So it isn't until the summertime, midsummer, where you start to see a higher conviction |
| 1:35.5 | on a lower Fed funds target rate. |
| 1:38.0 | At least that's what markets are perceiving right now. |
| 1:40.5 | Waller did mention that he did not think Trump tariffs would have a big impact on inflation. |
| 1:45.9 | So for whatever that's worth. Also, in Fedland, the FOMC minutes for December were out today as well, |
| 1:52.9 | noted things like inflation still being elevated and they were going to take a cautious approach on rate cuts. |
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