The Dividend Cafe Thursday - July 24, 2025
Jul 24, 2025
Learn about the current state of the financial markets, where mixed performances set the scene for intriguing discussions. The volatility index is at low levels, hinting at bullish sentiment. Dive into the contrasts between Japanese and European markets, shaped by demographic shifts. Explore the appeal of the municipal bond market as it bounces back from prior losses. Finally, uncover insights on jobless claims and home sales, providing valuable investment and tax planning strategies for savvy investors.
AI Snips
Chapters
Transcript
Episode notes
Low Volatility, Bullish Markets
- The volatility index (VIX) is down near pre-pandemic levels, indicating low market fear and bullish sentiment.
- This low volatility corresponds with markets being more priced in for positive upsides.
Trade, Rates, and Growth Drive Markets
- Positive trade rhetoric, declining interest rates, and US economic resilience support a bias towards rising risk assets.
- Japanese and European markets trade at a discount due to demographics and lower GDP growth compared to the US.
GDP Growth Explains Market Discounts
- Japan's GDP growth in 2024 is near zero at 0.2%, while US growth is much stronger at 2.8%.
- This GDP growth gap helps explain the persistent valuation discount for Japanese equities compared to the US.