Dear Valued Clients and Friends –
A delightfully normal Monday Dividend Cafe today as we go around the horn to all our normal spots.
Dividend Cafe on Friday dug deeper into what to expect from Kevin Warsh as chair of the Federal Reserve. The written version is here (my favorite), the video is here, and the podcast is here.
Off we go…
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Market Action
- Markets opened up a hundred points this morning and gave that up in the first ninety minutes of trading, then hugged the flatline for the remainder of the day.
- The Dow closed down -63 points (-0.13%) with the S&P 500 up +0.12% and the Nasdaq +0.20%.
*CNBC, DJIA, April 27, 2026
- How hot has the semiconductor space been the last few weeks? Up 18 days in a row, and 43% above its 200-day moving average – that’s how hot.
- Long-time readers know the disdain with which I hold so-called “calendar indicators” – both for the fact that they (a) are remarkably low percentage indicators for things that get to be called “indicators,” and (b) are subject to a high variance around that already underwhelming indicator that makes their actual efficacy in any specific given year worthless. But for those who like hearing coincidental calendar data and pretending it has actionable investment application, the April-September months of a midterm election year are historically choppy and even slightly negative.
- The ten-year bond yield closed today at 4.34%, up three basis points on the day
- Top-performing sector for the day: Communication Services (+0.94%)
- Bottom-performing sector for the day: Consumer Staples (-1.18%)
- My theme about heavy M&A in 2025 proved very accurate, but I downgraded my grade in my annual review because the deal volume of activity was less than I expected, even though the dollar volume was much higher. The same trend is playing out thus far in 2026, with $880 billion of the $2 trillion of M&A thus far coming from > $10bn deals, and only $440 billion coming from sub $1 billion deals. h/t Torsten Slok
- Markets were down about 9% YTD in March, with peak Iran war uncertainty, and retail flows into ETFs were down 50% from the month before. Markets are up substantially in April, and flows are up 250% from the March level. Oh, the contrarian signals of all that is human …
Top News Stories
- Obviously, the news of the weekend was the preemption of the White House Correspondents’ Dinner by some lunatic madman hellbent on murder and assassination. Thank God no one was killed or even wounded. Virtually every significant leader in the administration was in the ballroom.
- Iran’s latest “peace plan proposal” is supposedly to agree to re-opening the Strait of Hormuz and moving nuclear negotiations to a later date.
Public Policy
- I don’t really have the words to say what I think about the apparent intention of the United States government to become the savior of Spirit Airlines. But yes, it is being very seriously discussed.
Economic Front
- Weekly initial jobless claims were 214,000 last week, leaving the four-week average right around 210,000, an extremely healthy and positive number, especially given other conflicting data in the labor market.
- Wages are starting to pick up, according to new data from the Federal Reserve Bank of Atlanta. Now, the rate of wage growth has been steadily declining over the last four years, so the recent pick-up needs a little more time to be validated, but it is an early, encouraging sign. The pick-up in the rate of wage growth is more pronounced for job switchers than for those still in the same job (unsurprisingly), but the overall rate’s pick-up is a positive indicator nonetheless.
Housing & Mortgage
- Home Price Appreciation (year-over-year) in March was +1.2% nationally, so negative net of inflation. This month’s year-over-year HPA is the lowest it has been since the AEI Housing Center began tracking the composite date thirteen years ago. The divergence is still high across the country (for example, Memphis is down -7.5% while Kansas City is up +9%). Every metro region in California, Texas, and Florida was below the national average
Federal Reserve
- I devoted a whole Dividend Cafe to the subject on Friday, but all appears to be on the right glide path now for Kevin Warsh to be named new Federal Reserve chairman by the middle/end of May.
- Market expectations in the futures curve are still about 70% no rate cuts the rest of the year and 30% that we get one more cut.
Oil and Energy
- WTI Crude closed at $96.69, up +2.4%
- Whoever had repeated new market highs and sustained $95 oil on their bingo card, please let me know
- Midstream was up +2% last week. It is a big week for earnings results in the space this week. Surprisingly, Kinder Morgan was down a tad last week despite kicking off quarterly earnings season with very solid results.
Ask TBG
| “Do you consider FDI (foreign direct investment) a form of Industrial Policy, broadly conceived? And should FDI be pursued by nation states, and where can it go off the rails?” ~ Mike D. |
| No, foreign direct investment is not industrial policy – and it requires a real confusion of cause and effect to label it as such. Certain government actions promoting or targeting a given industry or company are the literal definition of industrial policy, and some industrial policies may be done to attract FDI, but the FDI is not the policy but a consequence of the action. But FDI can (and does) take place all the time when it is a healthy and natural by-product of open markets for capital and goods and services, totally disconnected from government intervention via industrial policy. Market-driven capital allocation is the opposite of industrial policy, and for attractive countries, sectors, and companies, it can generate foreign investment very organically. |
On Deck
- With four of the Mag-7 names reporting quarterly results this week (Meta, Google, Microsoft, Amazon), it is sure to be a big week in markets. Far more than earnings results, markets are likely to ask: “Has anything changed with their plans for capital expenditures?”
Reach out with any questions, any time! And Go Knicks!
With regards,
David L. Bahnsen
Chief Investment Officer, Managing Partner
The Bahnsen Group
www.thebahnsengroup.com
The Dividend Cafe features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet.
