Dear Valued Clients and Friends –
Another Monday and another trip around the horn here in the Dividend Cafe …
The Friday Dividend Cafe did a deeper dive into the state of the U.S. economy with an objective look at jobs, inflation, housing, GDP, and more. The written version is here (my favorite), the video is here, and the podcast is here.
Recent media action: CNBC last Thursday here and Hugh Hewitt last Thursday here
Off we go …
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Market Action
- Markets opened up +130 points today and moved a bit higher throughout the day.
- The Dow closed up +203 points (+0.44%) with the S&P 500 up +1.55% and the Nasdaq up +2.7%
*CNBC, DJIA, November 24, 2025
- There is almost no question market actors seem more focused on than why Nvidia would go down after such a good quarter, especially after initially going up over +5%. The roughly -15% drop since its Oct. 29 high is not a by-product of anything present or past (where obviously sales and orders are all stellar), but rather forward-looking. Does present valuation reflect all the good news, and then some? Is the rate of growth declining? Is the current valuation, given a declining rate of growth, warranted? Are hyper-scalers backing off? If not yet, will they in the future? Should they? Is the risk embedded in all these questions sufficient to rethink price action? This is what I see playing out in markets right now, and much more violently with some companies than with Nvidia.
- By far the biggest % carnage in shiny objects has not even been the main players of AI, but rather the main players of crypto, where a name like MicroStrategy is down a stunning 67% not all that long after being [inexplicably] added to the S&P 500. The company’s business model was to buy bitcoin at X and have it be worth 2x in their valuation. Then, with a stock price higher, they could issue more stock so they could buy more bitcoin, which resulted in bitcoin magically being higher in how it was treated in their stock price (giving the ability to sell more stock, still, and buy more bitcoin, still). If only there were a word for this kind of scheme? Anyways, it has, shockingly, been unraveling. Who could have seen that coming?
- The ten-year bond yield closed today at 4.03%, down three basis points on the day as the rally in the long bond continued despite a risk-on day for equities.
- Top-performing sector for the day: Communication Services (+3.9%)
- Bottom-performing sector for the day: Consumer Staples (-1.32%)
- In concert with recent equity market volatility and risk asset weakness, high yield bond spreads have widened to 306 bps, which seems very healthy to me, but wider than the 255 or so we saw just weeks ago, back when Nvidia was $212, and Bitcoin was $125,000 …
- The Friday rally saw 10-to-1 advancers to decliners and may have helped solidify weakening market internals as we get ready for the final five weeks of 2025.
- “Seasonality” arguments continue to be the dumbest thing I am forced to read most days, and I assure you, that is saying something.
- From a sector standpoint, you had Bitcoin down -30% in recent weeks, alternative asset managers down -15%, a blend of AI stocks down (on average) -12%, but the S&P 500 was only down -5.5% in its recent drawdown.
- 98.2% of Healthcare sector stocks were up on Friday.
Top News Stories
- I would say the biggest cluster in the news cycle is what is or is not happening on a potential Russia-Ukraine deal as proposed (or not proposed) or designed (or not designed) by the U.S. The word is that Ukraine is taking a few days to develop its reply, and there have been conflicting reports on whether the U.S. is presenting this as a take-it-or-leave-it offer.
Public Policy
- The President’s very strange social media post Saturday night and the abundant talk of White House contingency plans for tariffs give me even more reason to believe the White House is expecting an unfavorable Supreme Court ruling on the President’s IEEPA rationale for tariffs. The “prediction markets” have favorable ruling odds down to just 25%.
- Everyone I am speaking to believes another government shutdown will be averted as the White House will end up essentially offering some extension of subsidies under the Affordable Care Act. The report making the press is that the new subsidies will be limited to those with income at or below 700% of the poverty line. Sometimes you can’t make this stuff up.
Economic Front
- I mentioned it in Friday’s Dividend Cafe, which was, itself, a deeper look at the current state of the economy, but the belated September jobs report that came out Thursday showed 119,000 jobs created in September, but additional downward revisions from the summer of -33,000. The unemployment rate sits at 4.4%.
- The trade deficit for August came in at $59.6 billion (yes, we have a reporting lag due to the government shutdown; back in August, every NFL football team was undefeated)
- As for my concerns around current AI capital expenditures … (h/t ChartStorm)
Housing & Mortgage
- Existing home sales increased +1.2% in October and are up +1.7% versus a year ago. More or less, the very low pace of housing transactions from 2024 continues in 2025.
- Basically, for the first time ever, the average new home price is lower than the average existing home price. Existing homes have “still too low” inventory, keeping prices higher, and more importantly, they have existing mortgages that cause sellers to “hold” due to the low mortgage rates they have locked in. New homes obviously do not deal with that phenomenon, and the sellers (the new homebuilders) are more eager and motivated. This is a surreal development.
Federal Reserve
- NY Fed President John Williams went out of his way on Friday to say that he wants a December meeting rate cut. Futures markets have moved up to 71% odds of a cut at the next meeting (from just 40-50% much of the last two weeks).
- Peter Boockvar, who is a friend and wonderful analyst, made the point that he does not believe the NY Fed President made these comments without the blessing of Chairman Powell. To that I say, absolutely. 100%. No doubt about it.
Oil and Energy
- WTI Crude closed at $59.03, up +1.65% on the day
- Midstream was down -1.3% last week, but MLPs were only down -0.3%, as the S&P 500 dropped -1.9% on the week (and oil was down over -3%).
On Deck
- There will NOT be a client Weekly Portfolio Holdings Report this Wednesday due to the Thanksgiving holiday week. The Friday Dividend Cafe will actually come on Wednesday and will be the annual Thanksgiving edition.
To all, a good Monday night. Congratulations to the Cowboys on their biggest comeback win in history. And may all of your Thanksgiving Day and Thanksgiving weekend football hopes come to fruition.
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.
