Company: GDV-PK
Filing Date: 2025-03-10
Form Type: N-CSR
Source: 0001829126-25-001652
Chunk: 2

Company: GABELLI DIVIDEND & INCOME TRUST
Filing Date: 2025-03-10
Form: N-CSR
Chunk 2
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Despite concerns the economy might be slipping into a recession, the U.S. economy continued to perform well in the third quarter, no doubt helped by a massive amount of liquidity in the financial system and debt-financed spending by the Federal government. In the third quarter, the total return of the S&P 500 was up about 6%, with value stocks, as measured by the S&P 500/Citigroup Value Index up 9%, and growth stocks, as measured by the S&P 500/Citigroup Growth Index, up about 4%. The current federal budget deficit, however, is running at over 6% of GDP, an alarmingly high level when the unemployment rate is a relatively low 4%.

Long-term interest rates, as measured by the 10-year U.S. Treasury bond, dropped about 60 basis points from 4.4% to 3.8% during the quarter. After a full year of keeping short-term interest rates steady at elevated levels, the Federal Reserve finally decided to start the process of lowering short term rates. The Fed lowered rates by 50 basis points to bring rates down to 5.0%. We expect the Fed will continue to lower rates over the next year, but probably at a more measured pace of 25 basis points at each instance. Inflation has come down considerably and is now running below 3% annually, which is relatively close to the Fed’s long-term inflation target of 2%.

In the fourth quarter, the total return of the S&P 500 Index was about 2%, with value stocks, as measured by the S&P 500/Citigroup Value Index, down almost 3%, and growth stocks, as measured by the S&P 500/Citigroup Growth Index, up about 6%. Long-term interest rates, as measured by the 10-year U.S. Treasury Note, increased by about 80 basis points