The Dividend Cafe

with your host David L. Bahnsen, CIO and Managing Partner of The Bahnsen Group Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

There are a lot of places to go on the map right now. Markets were not just "up" throughout most of June/July/August, but they were "boring" in the way they did it. Limited volatility. Total transcendence to some of the silliness in how the media covered COVID. And a pretty consistent slow-burn to the upside. September has now invited normalcy back, and by normalcy, yes, I do mean frothy, over-valued tech positions getting re-priced (and that process could be in very early innings from where I sit), but also just plan going up and down - the standard bi-directional definition of volatility. We have a number of things going on in markets right now that will be discussed in this week's Dividend Cafe, and I suspect the conclusions I draw will be really satisfying for some, and really unsatisfying for others. I am hearing more and more people talk about certain things that seem obvious to them. This is the most bullish thing you could hope for if you are a contrarian (or a half-way decent hedge fund manager). In this week's Dividend Cafe we will look at ... • What all may be wrong or not wrong with markets • Five facts to focus on through the weeks and months ahead • Cash levels are still very, very high - but what does that mean? • Whether or not 2009 has anything to teach us right now • All the things happening in the economy (must read) • Politics and Money, and now the Supreme Court? • And of course, the Chart of the Week And with that, let's dive into the Dividend Cafe ... Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market had been pointing to a modestly positive opening all night and into the very early morning futures action, but around 5:30am turned south, again led by technology. The market opened down 250 points, and then went up 500 points (so up 250 on the day), and then bounced around throughout the day. It closed up just +50 points or so with all indexes about the same on the day in percentage terms. The timing of the downturn this morning came right as the weekly jobless numbers came, but truth be told there was nothing unsurprising at all in the jobs data, so I doubt that was related. More or less, I think the markets are zigging and zagging because that is what they do – and notoriously so this time of year. I do not expect anything different for the next couple of months. Lots and lots of COVID info today, and plenty on housing etc. — off we go! Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market dropped 500 points yesterday but today rallied back ~140 points. One big tech name today was a huge part of the S&P/Nasdaq rally … The market drop yesterday (at one point down nearly a thousand points, but closed down ~500) allegedly started with a report that a number of global banks had “moved illicit funds” over a 20-year period from 1997-2017. No doubt, this was but one factor with talk of another lock-down in the UK being another, and concern about greater political (and societal) drama (in the aftermath of the Justice Ginsburg passing) being another. Let’s go around the horn today with ample COVID information and perspective, and plenty on the public policy front, housing, and Fed as well … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

• The big unknown of corporate profits in the here and now and future • Impact of perpetual quasi-COVID lockdowns • The ambiguity of the present economic condition • Operation Magnify • Why financial services are under-valued, but not for the reason many think • A sober assessment of the state of stock buybacks • Why corporate bond yields matter so much to stocks, and everything else • Night trading more important than day trading? • Politics and Money: A new poll you haven’t seen in the news • Chart of the Week: Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market dropped 130 points today (Dow). Futures were down 300 when I woke up this morning and the market opened down 300, then actually went up on the day, then fell over 300 again, then zigged and zagged into the close before closing down 130 (-0.47%). The Nasdaq was down 1.25%, and it remains off right around 10% from its high. The weekly jobless claims came in at 860,000, as expected, but continuing claims dropped by almost a million, landing at 12.6 million (now half of that 25 million high we had early on). There is a lot today – from Housing to the Fed to policy to oil – the way I like these missives to go – but starting off with all the COVID news that is fit to print … Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

COVID Health Information • The seven-day average of 34.7k new daily cases is down 48.4% from the July 22 peak. • The BioNTech/Pfizer vaccine project has said they believe it is “likely” their vaccine will be distributable before the end of the year. They obviously cannot predict what the FDA approval process will look like but there seems to be a lot of confidence in the direction of their vaccine trials. They recently expanded their trial pool from 30,000 to 44,000. • Madrid’s hospitalizations through the so-called “second wave” of Spain are 1/7th (14%) that of what they were in the spring. I hate being so redundant with you but often the news itself is redundant. The cases are less severe, the people are healthier, the treatments are better, and so forth and so on • New cases in Denmark have tripled, whereas in Sweden they have barely moved. As for what could possibly be causing this dynamic, I guess I would refer you to:all the media reports covering this prior issues of COVID & Markets. • JP Morgan has determined that productivity does, indeed, fall for employees working from home. In other news, I have determined that the sun is hot. • The University of Pittsburgh School of Medicine has a promising development you may want to read more about. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Download White Paper HERE - https://thebahnsengroup.com/dividend-cafe/special-election-issue-dividend-cafe-sept-11/#download Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

David reminisces about the 9/11 and the aftermath of the city and the people of New York City. Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

The market dropped 400 points today despite opening up over 200 points. The 600-point intra-day reversal was led by the Nasdaq’s almost 400-point intra-day reversal, bringing the recent peak-to-trough drop now to ~9.6%, so not quite 10% correction territory on a closing basis. There was not a particular catalyst to the sell-off. The weekly jobless claims number came an hour before the market opened and the tick down did not begin until ninety minutes after the market opened. The fact that the Democrats blocked the Republican stimulus bill from coming forward for discussion was obviously not a surprise. The selling pressure in big tech just hasn’t settled yet, and that is where we are. Weekly jobless claims stayed around 850,000 on the week, and continuing claims stayed around 13.4 million … Okay – around the horn we go! Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com