DC Today is a daily missive from the Dividend Cafe of The Bahnsen Group. While the Dividend Cafe’s weekly market commentary is meant to be long-form, macroeconomic, and principle-driven, the DC Today’s purpose is to provide a daily synopsis of markets, politics, and current events. It will be short, sweet, and hopefully, informative. Our goal is to bring you the latest and most relevant market information and insights, written only by us. Please feel free to share The DC Today with your friends and family. And of course, we always welcome your feedback as to how we can make it more relevant and practical for you!


Dear Valued Clients and Friends –

My friends at Strategas Research compiled these July media headlines:

Strategas Research, Technical Strategy Report, July 20, 2021, p. 19

Oh, but just one thing.  These are all from the Wall Street Journal on July 1 and July 2 in …


Yes, these headlines are 25,000 points ago in the Dow and eleven years ago.

In fact, the market bottomed two days after these various headlines appeared.  Now, back then, markets had already retraced 17%; in this case, markets are actually quite close to all-time highs.  My point is this: The headlines don’t really change.  The media playbook doesn’t really change.  And neither does this evergreen reality: Investor behavior drives success.

Lots to cover today …  Off we go!

Market Action

  • Pre-market action was a wild wide.  Futures did open over +150 points last night, and zigged and zagged around a bit even as the Nikkei dropped another 1%.  Futures were up early this morning but fluctuating between +50 and +200.
  • The market opened up just +50 points or so but within minutes began a steady move higher  By an hour after the market open the Dow was up over +500 points.  The market got as high as +660 points today before closing up +550 points on the day (+1.62%).  The S&P was up +1.52% and the Nasdaq +1.57%.

*FactSet, DJIA, July 20, 2021

  • I find short-term trading to be a fool’s errand, and find technical analysis to be mostly a vehicle for short-term trading.  That said, the S&P 500 holding the 50-day moving average yesterday (for the sixth time this year when under distress) seems to reinforce market durability for the time being.
  • My view is that Energy, Financials, and Materials are the most oversold as a by-product of the reflation trade unwind.  I suspect this has been overdone.
  • Where you did not get much buyable weakness in this realignment is in Technology, with only 16% of stocks in the sector at three-month lows.
  • The ten-year bond yield closed today at 1.22%, up nearly four basis points on the day
  • Top-performing sector for the day: Industrials (+2.74%) and Financials (+2.42%) – pro-cyclical rebound from oversold conditions
  • Bottom-performing sector for the day: Consumer Staples (-0.08%)
  • Bitcoin dropped to $29,500, now down 55% since its April high three months ago.
  • Just for context …  The “fear index” is not pricing a lot of extended concern on equity markets.

Top News Stories

  • The “Blue Origin” space exploration endeavor successfully completed an 11-minute trip to space with Jeff Bezos on board.
  • Wildfires are raging out west, particularly in Oregon right now, with California taking its brunt as well.

Public Policy

  • Senate Majority Leader, Chuck Schumer, is trying to force the Republicans to vote to proceed with the infrastructure bill tomorrow but is now saying all parties can continue negotiating over the weekend.  But the Republicans have said they want the legislative text complete before voting to proceed.  I talked to one source today who believes they will have a deal to proceed with discussions tomorrow, and another source who is very doubtful.  So, we shall see …
  • Meanwhile, more and more House Democrats are hinting they will not accept the Senate bill as is – that they will want to make adjustments.
  • President Biden named Jonathan Kanter the head of the DOJ’s antitrust division.  He will still need Senate approval.  Kanter is known as a big opponent of the nation’s largest search engine company.


  • The percentage of people in LA County ICU there for COVID was just over 30% back in March, well after the vax era had begun.  Now, two weeks AFTER this Delta variant conversation has taken place, that number is 20%, down a third from March.  Hospitalizations are down 87% from high levels earlier in the year.
  • Nearly 80% of U.S. adults either have a full vaccination or natural immunity from prior infection.

Housing & Mortgage

  • I have talked so much about residential real estate lately, I thought a little update on the commercial mortgage sector was in order.  The percentage of loans in “special servicing” in the CMBS space dropped for the ninth month in a row (down to about 8%).  Lodging and Retail continue to require the most attention but have substantially improved.

*Trepp Report, June 2021

  • Housing starts were up +6.3% in June, 50,000 more than expected.  This is the second month in a row of construction picking up, indicating to me that things may be moving in the right direction after supply-related challenges earlier in the spring.  If materials costs do come down and supply does come up, that may be the most market-oriented way to cool housing prices as the Fed continues its kerosene of low rates.

Oil and Energy

  • WTI Crude closed at $67.47,up +1.69% on the day
  • A little reinforcement for why recent energy sector weakness around crude volatility was not fully understood …

*Strategas Research, Technical Strategy Report, July 20, 2021, p. 14

On deck

  • We will see tomorrow if the bipartisan infrastructure bill lives to fight for another few days or if it gets killed before things go further.

Have a wonderful evening, and reach out for anything you need.

With regards,

David L. Bahnsen
Chief Investment Officer, Managing Partner

The Bahnsen Group

The DC Today features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet.

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About the Author


Founder, Managing Partner,
and Chief Investment Officer

David is a frequent guest on CNBC, Bloomberg, and Fox Business and is a regular contributor to National Review and Forbes. David serves on the Board of Directors for the National Review Institute and is a founding Trustee for Pacifica Christian High School of Orange County.

He is the author of the books, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (Post Hill Press), The Case for Dividend Growth: Investing in a Post-Crisis World (Post Hill Press) and his latest, Elizabeth Warren: How Her Presidency Would Destroy the Middle Class and the American Dream (2020).

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