About this episode
Brian Szytel recaps a Wednesday session that began with a recovery bounce led by technology as interest rates and WTI fell, but the rally fizzled and selling in tech resumed while value names held up better. He says markets are digesting valuation pressure with stocks trading around 22–23x earnings and uncertainty around the Strait of Hormuz and U.S.-Iran negotiations, which could affect oil prices. He highlights the 2s/10s spread flattening from about 80 bps earlier in the year to about 26 bps, suggesting slowing growth and potential Fed policy risk as inflation remains a concern; markets imply a high chance of at least one rate hike by year-end. The key data point was weak May new home sales (580k vs 640k expected) and elevated unsold new-home inventory at 9.4 months amid high mortgage rates.
00:00 Market Bounce Fizzles
00:44 Valuations and Oil Risk
01:35 Yield Curve Warning Signs
02:00 Fed Policy and Rate Hike Odds
03:15 Listener Question on Spreads
04:03 Housing Data Miss
05:11 Wrap Up and Sign Off
Links mentioned in this episode: DividendCafe.com
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