The equity indexes are all over the board today–the DJIA was up 500 points overnight and now is up a measly 30 points. The tariff dance continues–1st they are one and then they are off–one way or another (Trump or the courts).
Interest rates have been a bit more static and now the 10 year treasury is trading at 4.45% which is 3 basis points lower than yesterday.
Today I am in review mode once again–simply reviewing all holdings to see if more rebalancing is in order after my sells and buys in CLO issues earlier this week. I watch the boob tube news and all the interviews with Senators give me NO confidence whatsoever that the Senate will propose more cuts in government spending and certainly any tax hikes are not even part of the discussion—not exactly an environment for confident investing.
One item of note is that CD rates have moved 5 basis points higher–which serves to make buying risky assets more difficult–every little bit more one can earn on a ‘safe’ CD has to be weighed against whatever one buys in preferreds and baby bonds and the added risk of potential capital loss.
Well I will likely sit tight today–no buys or no sells. We have the PCE (personal consumption expenditures) number tomorrow–should be most interesting.
Again my concern Tim is looking ahead to the next quarter we will see farther erosion in margins and profits when companies report 2nd quarter earnings. I think mainly consumer discretionary and essential services and spending as purchase will be put off until absolutely necessary.
I’m seeing more local governments having discussions of spending cuts to balance budgets. Some decisions are being put off I suspect because they are unsure of revenues and hoping there is going to be a change. In my area the streets are being patched and not re-paved completely. I walked out and talked to the city employee and talked to the construction co. doing the work.
I asked the city employee what happened to the plan to re-pave the entire street after they tore up the street to install the pipeline from the treatment plant to the golf course to use reclaimed water. He said they are paving the trench for now with no plans for the entire st. The contractor said it would have been cheaper if they had done the whole street at one time.
If we go into a recession I think things will get worse.
Charles M–I hear you–the state of Minnesota is hurting as they spent all their giant surplus and more. Now they can’t agree on a budget (dems and repubs) and they have to have a special session to hammer it out. Of course the tightness at the fed and state level will flow downhill and counties and cities are going to have to find a way to be weaned off all of the ‘free’ money they have been receiving.
yup, exactly my thinking.
$ that is sent to the the FED from local states is hardly free $,
Come to PA. Our streets are a bumpy patchwork of small pavement from utilities digging and just patching where they worked.