Tuesday - March 17, 2026

Welcome to the dividend cafe, weekly market commentary focused on dividends in your portfolio

and dividends in your understanding of economic life.

Good evening, welcome to dividend cafe.

I'm Brian Cytel, your host for this evening.

Speaking to you here from our Newport Beach California office here at the Bonson Group,

on a day that was positive overall in markets, but marginally so, we actually ended up closing

just off of the lows for the day.

So markets gave back earlier gains, but we ended up positive on the DAB by 46 points.

S&P was up a quarter of a percent.

NASDAQ was up almost a half of a percent.

So there's your stocks.

On Bons, we lost two basis points on 10 years, so we closed it 420.

10-year yields have been trading right around this range of 415 to 430 at the highest.

As far as the economic data on the day, there was not a lot of information.

We got a pending home sales for the month of February that was significantly better than expected.

So there is a chance that some slightly lower mortgage rates are causing some

unthawing of housing.

That's in just the pent up demand and the fact that it's been stuck here for

called five years with rates having moved up 500 basis points from their 0% lows.

So some of that activity I think is definitely a good thing.

It's a big part of the economy, but that's all there was in the economic calendar.

Tomorrow, we're going to have two things out, which are more important,

which is the PPI number and then the conclusion of the Fed's two-day meeting.

And it's widely expected they're going to leave rates unchanged at 350 to 375.

But it'll be interesting to note where some of the dot plot changes may occur.

Now that there's this new geopolitical event for them to put into their calculus.

As far as some of the comments that David wrote about today,

really, there's three major concerns for the market right now.

There's the war with Iran.

There is fear of a private credit and there is a change in the appetite for AI capital expenditure.

So if we break all of those things down, if you talk about the war in Iran,

then our take here is that while it won't be ending tomorrow,

it also won't be some sort of forever war.

I don't think the market has a rationally priced that in.

It's not likely for many reasons.

I don't know that the market is necessarily priced in the fact that it is a war to begin with.

It's almost a campaign at this point.

Those things can change and that's certainly not making light of any of the human element

of what's going on here at all.

So I'm just telling you where markets are pricing things in on the war side.

So most likely to end at some point, not be a forever war.

And as far as the timing, TBD, all of those things markets are anticipating in the price

and I think fairly adequately, which is to say that markets haven't really moved that much lower.

The Dow is down maybe six, seven percent or so from the highs.

It's negative on the year by about two and a quarter percent.

That's not a huge move.

Okay, next topic, private credit.

So I think that the idea of just a wave of massive defaults is, frankly, just silly.

I understand the media headlines and the popularity of New York times

and Wall Street Journal writing articles about potential defaults,

but just understand it's a percentage of the entirety of the market.

You're talking about sub five percent on non accrual.

So that is not enough for me to be concerned.

The fact that there's retail ownership in the space and probably irrationally,

meaning that there is too much retail ownership in a space that is supposed to be

for accredited investors only.

But there is more selling going on in that selling is causing gated redemption.

That's to protect the value of the loans that are inside the portfolio, nothing else.

So that said, is there some contagion effect that when you have people hitting the cell button

can cause some price deterioration, sure.

But do I think it's even mid single digits at this point?

No, could you get a few single points out of it potentially?

But we'll see how that unfolds for now.

It isn't something that is keeping me up at night at all.

Okay, AI.

So this is going to definitely be multi-pronged in the answer.

So are the hyperscalers going to continue to be able to spend as they have been?

No, are they going to spend zero?

No, they're going to continue to spend, but just a slowing delta.

And that's fine.

The reality is with valuations trading where they are, is that priced in,

is that declining growth rate and capex priced into models.

And then the other part is just the ROI associated with all the capex.

When does that start to actually pencil for the investment that has been made?

So that's an ongoing question markets have for the AI space.

So there's your three topics.

Question in there is about, what do the mean for an advisor to be a fiduciary?

The difference is brokers are recommending investments that are suitable.

Not necessarily in the best interest, but they are suitable.

And because they get paid from the investment company in the brokerage house

versus the clients that they're recommending these investments for, that makes sense.

They've got a duty of care, but it's just for suitability.

The fiduciary is legally obligated to put clients citrus first.

And of course, the only way that the fiduciary can get paid is by a debit

from the client account.

So the client is paying directly for the advice.

The advisor is unable to earn any money or any income or any compensation

or have any conflict from a brokerage firm, from a custodian, from an investment house

or from anything else, makes it pretty clean and straightforward.

Like you would pay an attorney to provide you legal advice.

Same thing.

You would pay a fiduciary financial advisor to provide you financial advice.

There you have it for today.

I'll be back with you again tomorrow.

And like I said, there'll be more to chew through in the economic calendar.

With that, I wish you a lovely evening.

Thanks so much.

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