Lately it seems that we are always awaiting ‘news’—in particular inflation news. This week we have the personal consumption expenditures (PCE) data on Friday and just watching interest rates yesterday and this morning it appears that it is highly likely that rates will drift in the 4.15% to 4.30% area. Watching paint dry is kind of boring, but it is always fine with me as long as I am making money–really it is simply what we do.
Today we have durable goods orders being released at 7:30 a.m (central). It is unlikely that anything in this economic release will move markets. At 8 a.m. we have the Case Shiller housing price index–it will show prices continue to rise–no surprise to me. The supposed high mortgage interest rates are more and more being accepted by folks as the new norm–the ‘haves’ don’t worry as many, many are paying cash for new houses–the ‘have nots’ are simply screwed. Yes they may qualify for government backed loans–i.e. FHA, but my experience says that the more houses sold with FHA, VA and other government backed programs that occur the more likely we will see a housing event of some sort when/if a recession comes.
As everyone knows business development company Trinity Capital (TRIN) sold a new baby bond yesterday with a coupon of 7.875%–right in the area of other BDC baby bonds sold recently. The company may use some of the proceeds to redeem some of their 7% baby bond due 2025 (TRINL). I own some of the TRINL issue and thus lost a bit yesterday as the shares moved lower by 22 cents–no big deal. I own TRINL for the 7% coupon and for the stability of the share price being that short maturity issues will trade at $25 plus accrued and this has not changed. If they redeem some of the issue it will be on a pro rata basis that is ok–I can buy more shares if I desire.
Well equity prices are higher this morning–we’ll see if this holds up–no reason to think markets will tumble–all news is good news.