The Dividend Cafe Wednesday - August 27, 2025
Aug 27, 2025
In a vibrant market landscape, the discussion unveils a positive outlook for stocks and bonds. The upcoming PCE data is highlighted as a crucial indicator. A compelling debate surfaces over the rise of private capital markets, attracting investors with lower interest rates. The resilience of cyclical sectors showcases potential growth, alongside ongoing trends in IPOs and public financing. Investment strategies are examined, focusing on the importance of understanding risks. Overall, listeners are encouraged to stay informed and ask questions.
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Market Breadth Signals Expansion
- Markets and bonds are positive with mild bond yield declines and a steepening curve that signals healthy GDP prospects.
- Cyclical sectors and strong small-cap breadth indicate the global economy is expanding despite geopolitical noise.
Monitor Upcoming PCE Data
- Watch the Friday PCE release closely since it will drive market reactions after recent hotter PPI and CPI prints.
- Expect monthly PCE ~0.3% and year-over-year near 3%, which markets will price in.
Prioritize Valuations Over Market Timing
- Focus on valuations and asset allocation instead of trying to time the market’s peaks and troughs.
- Keep hedges and reasonably priced positions rather than sitting fully on the sidelines.