The Dividend Cafe

Brian Szytel from The Bahnsen Group recaps a modest down day in markets—Dow down 267 points, S&P 500 down 0.25%, and Nasdaq down 0.33%—while noting the market remains up on the week. The 10-year yield edged down to about 4.07% amid expectations that a new Fed chair in May could eventually bring short-term rate cuts. He discusses rising Middle East tensions and increased U.S. presence tied to Iran, which has helped push crude higher (about 6% over two days; up ~15% YTD), but argues energy’s strong performance is primarily driven by supply/demand fundamentals and well-run businesses, with the sector up ~23% YTD and 95% of names above their 200-day moving average. He highlights leadership from defensives like energy, industrials, staples, and materials—often a late-cycle signal—while technology and communication services lag, with only ~40% of names above their 200-day averages; he notes some software valuations have compressed from mid-30s multiples to low-20s. Economic updates include better-than-expected initial jobless claims (206k vs 220k), a wider December trade deficit (over $70B vs ~56B expected), a stronger Philly Fed manufacturing reading, and weaker pending home sales. He closes by answering a question on non-GAAP vs GAAP P/E ratios, explaining non-GAAP adjusts for one-time items to estimate normalized earnings, while cautioning that recurring “anomalies” can make non-GAAP misleading and require careful analysis.

00:00 Market Close Recap: Indexes Dip, Rates Steady

00:52 Energy Sector Strength: Oil Headlines vs Real Fundamentals

02:08 Sector Rotation & Valuations: Defensives Lead, Tech Lags

03:30 Economic Data Roundup: Jobs, Trade, Manufacturing, Housing

04:07 Viewer Q&A: Non-GAAP vs GAAP P/E Ratios Explained

05:28 Wrap-Up & Weekend Sign-Off

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Brian Szytel from Dividend Cafe provides a broad market update with all three major stock indices higher (Nasdaq up about 0.75%, S&P 500 up about 0.5%, and Dow up about 0.25%) while interest rates rose slightly, with the 10-year yield up three basis points. He reviews several economic releases, including January FOMC minutes that conveyed a more hawkish tone as inflation was described as slower to return to the 2% target, January industrial production that beat expectations (0.7% vs. 0.4%), and December durable goods orders that fell 1.4% but were better than consensus, with underlying measures stronger (excluding transportation up 0.9%, and core capital goods orders excluding defense and aircraft up about 0.67%, roughly double expectations). He notes housing starts and building permits were slightly better than expected but characterizes housing as still stuck due to interest rates, tax law changes, and reduced post-COVID mobility.

00:00 Market Snapshot: Stocks Up, Yields Higher

00:35 Key Economic Releases: Fed Minutes, Production & Durable Goods

01:41 Why Durable Goods Matter: Business Confidence & Capex Signals

02:40 Housing Starts & Permits: Still Stuck in a Range

03:10 Tariffs and GDP Explained: Net Exports, Double-Counting, and Reality

04:47 What’s Next This Week: PCE, GDP, PMIs & Consumer Sentiment

05:12 Wrap-Up: Broadly Positive Day + Q&A Invitation

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Today's Post - https://bahnsen.co/4cpsVcz

In this episode of the Dividend Cafe, host David Bahnsen discusses the intersection of artificial intelligence (AI) and economic productivity. Speaking from Orlando, Florida, David examines the potential and vulnerabilities of AI as an investment theme. He highlights the need for a deeper understanding of AI's impact on productivity and critiques the current optimism surrounding AI investments. David reflects on past tech investment bubbles, specifically the dot-com era, to draw parallels with the present AI investment climate. Emphasizing the importance of prudent judgment and strategic planning, he cautions against overestimating the immediate economic benefits of AI while advocating for a long-term, judicious approach to AI-driven technology.

00:00 Introduction and Conference Update

00:44 AI Investment Themes and Vulnerabilities

05:00 Economic Productivity and AI

08:32 Studies and Reports on AI Productivity

11:35 Historical Parallels: AI and the Dotcom Bubble

14:58 Investment Strategies and Risks

19:07 Conclusion and Final Thoughts

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

In this episode of Dividend Cafe, Brian Szytel discusses the day's market reversal, with significant drops in the DOW, S&P, and Nasdaq. He highlights the ongoing rotation and decline in tech stocks, and notes falling long-term yields. Key economic updates include initial jobless claims and a notable drop in existing home sales. Szytel explores themes such as positive economic growth, new Federal Reserve leadership, and AI productivity growth. He delves into S&P earnings expectations, margin analysis, and the impact of lower inflation on real sales growth. Finally, he addresses a question about political influences on Fed leadership, emphasizing the qualifications and impartiality of the candidate in question.

00:00 Market Reversal and Daily Performance

01:08 Economic Indicators and Market Reactions

01:36 Sector Analysis and Earnings Expectations

02:38 Volatility and Market Dynamics

02:58 Earnings Margins and Sector Disparities

03:58 Inflation Impact and CPI Anticipation

04:24 Political Influence on Fed Decisions

05:26 Conclusion and Final Thoughts

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

In this episode of Dividend Cafe, Brian Szytel provides an update on a mixed market day with little movement in the indices. The DOW dropped by 66 points, the S&P was flat, and the Nasdaq saw a slight decrease. Bond yields rose following a strong non-farm payroll report, which showed 130,000 new jobs against an expected 55,000, led by the healthcare sector. The unemployment rate also decreased to 4.3%, while hourly wages grew by 0.4% for January, totaling a 3.7% year-over-year increase. Labor force participation ticked up to 62.5%. Szytel addresses questions about inflation perceptions versus reported CPI, explaining the difference between disinflation and deflation. He concludes with a reminder that good news should be seen positively and notes market reactions to Federal Reserve rate expectations.

00:00 Introduction and Market Overview

00:27 Employment Report Insights

01:25 Labor Force Participation Trends

04:00 Inflation and Personal Experience

05:20 Conclusion and Final Thoughts

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com