MONDAY – November 17, 2025

Dear Valued Clients and Friends –

Brian Szytel is doing the video and podcast today as I am on a train from NYC to Boston mid/late afternoon for 24 hours of meetings.  But I was able to go around the horn in writing today’s Dividend Cafe, and there was a lot to cover today so the read is worth your time.

Dividend Cafe on Friday looked at the current AI role in markets, asks whether or not it is a “bubble,” answers that question, and lays out a handful of considerations and concerns, followed by lessons for investors in this critical moment.  The written version is here (my favorite, by far), the video is here, and the podcast is here.

I was on Varney this morning for the opening hour and got to talk about a handful of different topics.

Off we go …

Market Action

• The market opened down today, zigged and zagged throughout the day, and worsened in the second half as the market rotation continued.
• The Dow closed -557 (-1.18%) with the S&P 500 -0.92% and the Nasdaq -0.84%.

*CNBC, DJIA, November 17, 2025

• People who believe the selling last week in tech/AI stocks represents a cooling off of the market may be in for a surprise.  The Citi Panic/Euphoria Index remains at astronomically euphoric levels, and it will take a lot more than a few percent sell-off to cool that down.
• Not only has sentiment not yet taken a hit, but internal technicals haven’t, either.  Over 50% of the S&P 500 constituents still sit above their 200-day moving averages.
• The ten-year bond yield closed today at 4.14%, down -1 basis point on the day.
• Top-performing sector for the day: Communication Services (+1.13%)
• Bottom-performing sector for the day: Financials (-1.93%)
• The “shiny objects” of 2021 are different than the “shiny objects” of now.  The outcome is never different – just the subject matter and the timeline.  Rare earths?  Down -50%.  Nuclear?  Down -51%.  Quantum?  Down -59%.  Space?  Down -41%.  Now, would I put “AI” in the bucket of “shiny object”?  Certainly, some AI stocks are shinier and more absurd than others …  but my more nuanced and defined view of AI was laid out Friday.
• I am getting a lot of people asking me to comment on Bitcoin dipping below $92,000 today, down over -26% from its recent 2025 high and now dipping into negative returns for the year.  I don’t have a comment for all the reasons I have stated a million times – a purely speculative holding can go to $200,000 or $20,000, and I, like every other person on earth, have no idea what it will do next.  Why it goes up is because of speculation (usually leveraged speculation), and when it goes down, it is due to the de-levering and unwinding of that speculation. But I don’t have a point of view on its pricing or value, and don’t care that it is down -26%.  I don’t think about it at all.

Public Policy

• Secretary Bessent sounded like a few people I used to know last week when he said they want to lower tariffs on things we can’t make here in the United States, like coffee and bananas.  He sounded like a few people I used to know when he said they wanted to do this to lower prices.  This is really significant not just because it will prove to be a very good decision for coffee and banana importers and coffee and banana consumers who have been really hurt by ill-advised tariff policy … it is significant because it is one of the first times I have heard the administration admit that tariffs are increasing prices, and one of the first times I have heard the administration concede that tariffs on items we cannot produce in the United States are problematic.  I am hoping this proves to be signs of entirely new (well, actually, old, thinking).
• To get into specifics, tariffs on Switzerland are being lowered from 39% to 15% and South Korea has said it will invest $150 billion in American shipbuilding and another $200 billion in other industrial sectors.
• This idea of a $2,000 stimulus check for all Americans below a certain income level seems to be a heavier topic of discussion in recent days from the administration.  As the Treasury Secretary said over the weekend, it would require legislation, and I really cannot see for the life of me how such an inane idea could be passed, but of course, a lot of bad ideas do become law – I just don’t believe the votes will be there for this idea.
• European Union leaders have warned Commerce Secretary Howard Lutnick against increasing the amount of products susceptible to high U.S. tariffs on steel imports.  They specifically warned that continued expansion would undermine the broader U.S.-EU deal reached a few months ago.

Economic Front

• I realize a lot of people are wondering about the state of the jobs market, given the delay we have had in official government data.  We will get specific data for September soon, with October to follow, and by the time that all happens, I imagine it will be time for November.  But the trendline, as we have known even before the shutdown, is graphically clear.  And I will add, this shows the same in both the labor participation rate and unemployment (two different things)

• The White House may have erred by circulating a research paper (and subsequently touting it on social media) from the Federal Reserve that discusses the non-inflationary impact of tariffs.  The paper argues that tariffs increase unemployment and end up pushing prices lower as they suppress economic activity.  You may think the conclusion of this new Fed paper sounds familiar.

Federal Reserve

• Three Fed presidents with votes on the FOMC have said they will vote against a rate cut in December.  We know Miran, Waller, and Bowman are all voting for a cut.  That leaves five Fed presidents whose votes we do not know, including Chairman Powell.   The odds have dipped below 50/50 for a cut at this point (just 41% as of this morning).
• The op-ed pages of the Wall Street Journal are a good place for a job application, as long as the job you are looking for is the chairman of the Federal Reserve.  For what it is worth, this happens to be the guy I hope they pick.
• The Fed has submitted final plans to ease the supplementary leverage ratio, essentially giving banks more credit for holding Treasuries on their balance sheet than they presently receive, allowing for greater leverage release.  A simpler way to say it: this new policy, recommended by Fed and Treasury regulators (and one I fully support), eases bank capital requirements in a completely sensible way.

Oil and Energy

• WTI Crude closed near $60, down a tad on the day
• Midstream was up +2.5% again last week, even as the broad market struggled.  The commodity price backdrop has been higher, which has probably helped sentiment on the margin.  The corporations were particularly strong (even more so than MLPs and Canadians)

Ask TBG

On Deck

• President Trump has a two-day visit from Saudi Prince Mohammed bin Salman, beginning tomorrow.  There was a time when the Saudi head meeting with the U.S. President would be the biggest story in the world.  Now, I can’t even find the press covering the fact that it is happening
• Dividend Cafe will do a big-picture check-in on the economy on Friday.  I should warn you in advance: It will be focused on facts, not agenda.
• Clients will receive their Weekly Portfolio Holdings Report this Wednesday, per usual.

I would say Go Cowboys for tonight, but I am sure many have lost hope.  It may be a lost season for the Boys of Dallas, and the game may be ending tonight after my bedtime, but Go Cowboys, anyway.

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.