While we don’t worry too much about moves of 5-7 basis points in the 10 year treasury it is apparent that income investors DO worry about these minor blips.
REITs are again off by 1% and trading at a 52 week low. Utilities are trading just 3-4% off their 52 week lows. Our average $25 preferred share in the universe we follow is off 5 cents which likely is near a low for recent years (although we don’t keep the historical data).
Interestingly MLPs are trading in the mid point of their 52 week range. MLPs will not move much with interest rates if there are good underlying fundamentals in the energy markets and there was a huge 7 million barrel drawdown in crude inventories announced today. These fundamentals are boding well for some of the stronger MLPs.
Investors can watch for a move above 2.63/2.64% in the 10 year–not that it is fundamentally meaningful, but it is the level that apparently traders are watching and we could see a knee jerk reaction in stock and bond markets above this level.