Dear Valued Clients and Friends –
I (David) have written today’s Dividend Cafe myself but Brian is doing the podcast and video as I will be on a plane to NYC this afternoon (currently delayed). There’s a lot here today so please do take it all in. And GO KNICKS!!
Dividend Cafe on Friday was a bit unique. I gave the commencement speech at Pacifica Christian High School in Newport Beach, CA, last week, and we used the speech as this week’s Dividend Café. It was a different category of message, but I stand behind the content. The written version is here, the video is here (with my daughter’s introduction of me, which is the only part I am watching over and over), and the podcast is here.
Off we go …
| Subscribe on |
Market Action
- Markets opened up +300 points this morning and gave up that lead throughout the day. The S&P and Nasdaq stayed positive but came way off of their highs.
- The Dow closed down -81 points (-0.16%) with the S&P 500 up +0.30% and the Nasdaq up +0.86%.
*CNBC, DJIA, June 8, 2026
- The carnage in the tech sector Friday was brutal, but there was a bit of recovery today. The 47% rally in the tech sector in just nine weeks going into Friday’s sell-off was the biggest nine-week advance in any sector, ever, exceeding even the blow-off top in late 1999.
- Bond yields spiked on Friday as the jobs report came in higher than expected (more on the jobs report in the Economic Front section below). Just to be very clear – this is a GOOD reason for bond yields to be going higher, and those rooting for lower bond yields often know not what they are asking for. The David Bahnsen recap of the matter: If the 10y yield captures nominal growth expectations, and nominal growth is made of TWO things (one good, one bad), then … wait for it … there are two things that can move bond yields – and one of them is good, and the other is bad. This is far, far easier than some people seem to understand.
- The announcement that S&P would not change their rules to add SpaceX to the index early was a big deal, a relief to many worried about market guardrails, and a surprise to those who were sure the fix was in.
- The ten-year bond yield closed today at 4.57%, up three basis points on the day.
- Top-performing sector for the day: Technology (+1.47%)
- Bottom-performing sector for the day: Utilities (-1.92%)
- Silver was up +64% in the first month of 2026 (and a ton in 2025). It is now down -5% on the year (so it has dropped -44% from its high). Gold was up +25% at the beginning of the year and is now down a pinch.
- With the recent bitcoin drop to below $60,000 (came back to $63,000 over the weekend), the drop from last year’s $125,000 level is officially greater than 50%. This puts it at the same price it was in 2021, so a 0% gain over a five-year period. But the comparisons to gold are somewhat bizarre, since gold had a 21% drawdown in the last decade, but bitcoin has had 82%, 58%, 65%, 75%, and now 50% drawdowns. My friend, Larry McDonald, pointed out that 5% of all bitcoin addresses own 62% of all available bitcoin. The liquidity deficit when a big holder sells is, shall we say, not normal.
- The huge drop on Friday was textbook rotational – only 1.7 decliners to every 1 advancer, despite the violence of the drop. Low breadth on a big overdue sell-off generally means “some stuff is too hot, and some stuff is due.”
Top News Stories
- Iran bombed Israel over the weekend (during the “ceasefire”). Shooting and escalation and retaliation appear to be simmering. President Trump has asked Israel not to respond, but as of press time, I do not know if that is mere public posturing by the President while a larger military response from the U.S. and Israel is being planned, or if it is actually the new policy and approach.
Public Policy
- The killing of the “slush fund” that the White House had wanted (so-called “anti-weaponization” fund), the House vote to approve a war powers resolution, and what I hear is significant Senate GOP opposition to this absurd idea of Bill Pulte being named Director of National Intelligence, are each in their own, individual capacity, not a big deal. But taken together do indicate a House and Senate GOP that, at least marginally, has become more willing to part with the White House on certain matters in this midterm election year.
Economic Front
- The May Jobs Report from the BLS on Friday showed 172,000 jobs created for the month, about double the expectations. The two prior months were revised upwards, which may have been the best part of the report. Local government hiring saw a 55k increase in new jobs, and leisure/hospitality jumped 70k.
- Data center construction and government are the main sources of increase, with the 3-month number better than the 6-month, which is better than the 12-month … meaning, things are looking better
- The labor participation rate remains at 61.8%, just abysmally low (the lowest since Sept 2021 at the depth of COVID insanity)
- Maybe AI is going to take all the jobs. Maybe not. But if it is, it is really waiting to get started.
- For those looking for the bad news, it is, once again, on the small business front. The NFIB reported the lowest “plans to hire” from small businesses since May 2020 (smack dab middle of COVID). Small businesses cite costs and state regulations as primary impediments to new hiring.
- For those looking for good news, solo-founder start-ups have surged in Q1.
Federal Reserve
- We are now looking at 5% probability of three rate hikes between now and the end of the year (good luck with that), a 22% chance of two hikes, and a 43% of one hike. So if you believe the fed funds futures markets, there is a 70% chance there will be some rate hike by the end of the year and a 30% chance there will be no change.
Oil and Energy
- WTI Crude closed at $91.44, up +1% on the day. Oil staying in the low 90s this long is pretty surreal, and at this point, a good reflection of the uncertainty around the entire escapade. It is not retreating to the 70’s because markets do not see a path to ending the conflict any time soon (apart from capitulation, which seems politically untenable). It is not escalating to the 120’s because markets do not see a dramatic escalation coming, which also seems politically untenable. So things seem stuck in a purgatory state of status quo, geopolitically, and with oil prices.
- The issue the oil and gas industry is harping on is inventories – what happens to prices when inventories dwindle down. I suppose there’s a possibility of a quick and dramatic ending to all this out there, that allows oil prices to drop $15-20/barrel quickly, but it doesn’t seem to be a very logical base case. And if oil prices have had a lower ceiling these last two months because of abundant inventories, and those are, in fact, about to dissipate, one has to take the possibility of a higher upside ceiling seriously.
- Midstream bounced back almost +3% last week despite an almost -3% drop in the S&P 500, both reflecting the rotation nature of things right now, the resilience of the midstream thesis, and most notably, its low correlation to market beta
- If one believes that AI is going to be big and that data centers will be needed to power AI, then I cannot for the life of me understand why midstream would not be in that investment thesis. Those data centers are not getting their electricity without natural gas, period, and that natural gas is not getting there without pipelines, period.
- I do not believe any investor in the oil and gas space right now should be treating it as some play on short-term oil prices related to this conflict. There could be a big escalation. There could be a big drop in oil prices. The long-term thesis for long-term investors should be (and is) the long-term need for profitable production of oil and gas to fuel long-term energy consumption needs. Period.
On Deck
- The May CPI report comes out on Wednesday this week
- Dividend Cafe this Friday on IPO Mania – what to make of these big IPO’s, what lessons there are for all investors, and why the psychology of these moments is very important to understanding investing.
As I await the destiny of my flight today, I will soon know where I will be watching Game 3. But I will say it again … Let’s 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.
