The Dividend Cafe

Brian Szytel reviews a mixed Thursday market session with the Dow slightly up, the S&P 500 down about 0.5%, and the Nasdaq down about 1.2%, highlighting value’s outperformance versus tech. He discusses Nvidia’s heavily anticipated earnings beat (including guidance) but notes the stock still fell, arguing expectations were priced in and that AI-related capex at big tech is already starting and will inevitably continue to slow from a record pace that has pushed Mag Seven free cash flow slightly negative; as free cash flow rebounds, he expects more shareholder returns via buybacks, acquisitions, and potential dividend growth. He then explains the Depository Trust Company (DTC) system created in 1973 to simplify securities ownership and transfers, addresses concerns about government seizure as unlikely, and cites MF Global’s 2011 misuse of client assets as an example of illegal but possible misconduct.

00:00 Market Wrap and Style Shift

00:33 Nvidia Earnings and AI Valuation

01:10 Mag Seven CapEx and Shareholder Returns

02:45 What Is the DTC

03:59 Can Assets Be Seized

04:58 MF Global Cautionary Tale

05:51 Closing Thoughts

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

David Bahnsen fills in for Brian Szytel with a Daily Recap recorded shortly before the close as markets trade higher (Dow up ~300, S&P up nearly 1%, Nasdaq up over 1%) and notes upcoming Nvidia earnings. He focuses on economic takeaways from the State of the Union rather than politics, highlighting the lack of new affordability proposals as potentially market-friendly. He says Medicaid drug price controls were reiterated but have little market impact due to low passage odds, and that pharma has largely navigated tariff threats already. He reviews proposals for government-matched quasi-401(k) plans for lower-income Americans, requiring hyperscalers to fund their own power needs, and an unrealistic idea of tariffs replacing income taxes. He supports banning congressional stock trading and notes omissions on credit-card rate caps and 2026 tax-cut reconciliation, while flagging a call to ban institutional ownership of residential real estate.

00:00 Market Snapshot Setup

00:36 State of the Union Focus

01:12 Affordability and Policy Restraint

02:15 Prescription Drugs and Pharma

03:25 New Savings Plan Proposal

03:42 AI Data Centers and Power

04:17 Tariffs and Tax Reality Check

04:45 Congress Stock Trading Ban

05:04 What Wasn't Said and Housing

05:48 Wrap Up and Sign Off

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Brian Szytel from The Bahnsen Group’s Newport Beach office recaps Tuesday’s market rebound: Dow +370, S&P +0.7%, Nasdaq +1%+, with the 10-year Treasury at 4.03%. He discusses reports of possible tax relief in the State of the Union as potentially positive for productivity and growth, while noting broader political concerns around tariffs and government involvement in private companies. He reviews the finalized broad-based tariff rate of 10% (down from a floated 15%), calling it a meaningful reduction—about $140B less in tariff revenue—supportive of economic growth. Szytel addresses media attention on private credit, saying delinquencies are only modestly higher, spreads remain tight, and lending continues; gated redemptions in some funds reflect illiquid underlying assets, not distress, and cited loan sales were near par (99.70). Economic data was broadly positive: Case-Shiller 20-city home prices +1.4% YoY (0.5% seasonally adjusted), consumer confidence rose to 91.2 vs 88.6 expected, and wholesale inventories were in line at +0.2% for December.

00:00 Market Rebound Recap

00:30 Tax Relief Headlines

01:17 Tariff Rate Update

01:57 Private Credit Reality Check

03:38 Today’s Economic Data

04:35 Wrap Up and Thanks

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

Today's Post - https://bahnsen.co/40qp47X

Snowed in New York recording opens with a sharp selloff (Dow -822; S&P -1%+; Nasdaq -1.1%). Weakness tied more to AI valuation and pressure in tech and financials than tariffs. The 10-year yield fell to ~4.03%; defensives led.

AI capex for 2026 is pegged at $650B across five firms. Nvidia’s $30B OpenAI investment is expected to cycle back via chip orders.

The Supreme Court ruled 6–3 that IEEPA cannot be used to impose tariffs; Congress retains tariff authority. Refund mechanics remain unclear.

Possible alternatives include Section 122 (150-day limit) and the more complex 301 and 232 routes. Strategas estimates a net $70B tariff reduction even if some measures return.

Refunds could total $120–130B, potentially stimulative, though implementation may be uneven. July’s USMCA review approaches amid improving U.S.–Mexico ties and rising U.S.–Canada tensions.

Q4 GDP was 1.4%; 2025 growth seen at 2.2% vs. 2.8% in 2024. Housing is softening, with markets pricing in 2–3 Fed cuts toward ~3%.

00:00 Snowed In Intro

01:15 Market Selloff Snapshot

03:24 AI Capex Reality Check

04:52 Supreme Court Tariff Ruling

06:33 Section 122 Workaround

08:06 Other Tariff Pathways

09:40 Economic Impact Estimates

10:44 Refunds and USMCA Fallout

12:56 GDP Housing and Fed Cuts

15:25 Geopolitics and Wrap Up

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com

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

David Bahnsen opens Dividend Cafe after a volatile week marked by a weaker-than-expected GDP report and a Supreme Court ruling striking down President Trump’s tariff rationale under the Economic Emergency Act (with a deeper tariff discussion coming Monday). His core thesis: disinflation is likely in 2026—and it may not feel positive.

He clarifies the difference between inflation (rising prices), disinflation (slower price increases), and deflation (falling prices). Bond markets are signaling softer expectations, with the 10-year Treasury near 4.07% and five-year inflation breakevens around 2.4%, suggesting modest real growth ahead.

Recent GDP registered about 1.4% annualized, distorted in part by a government shutdown, while core PCE inflation is roughly 3% year-over-year versus 2.9% a year ago. Bahnsen expects services-driven disinflation, particularly as rent measures catch up to real-time data. However, that may not improve affordability given tight housing inventory and a frozen resale market.

He also warns that business investment is overly concentrated in AI and data centers—echoing the fracking-era CapEx surge—while broader investment remains subdued. Risks to growth include a weak labor market with low hiring, a personal saving rate near 3.4% (raising the chance tax refunds rebuild savings instead of fuel spending), and muted bank lending despite lower rates.

00:00 A wild news week

01:48 Cutting through economic spin

03:23 Why 2026 disinflation may disappoint

04:36 Bond market signals

07:16 GDP and data distortions

10:49 Services-led disinflation

14:05 Concentrated CapEx risk

16:38 Labor, savings, and lending

20:09 Tariffs and demand drag

22:24 What to watch next

Links mentioned in this episode:
DividendCafe.com

TheBahnsenGroup.com