Income issues are solid today on a slight nudge from a double whammy from lower oil prices – slower growth in China at the same time Saudi Arabia indicates the may increase crude output.
This combination has served to push interest rates down by 6-8 basis points which can always be favorable to income issues. There are many issues red–but the majority of the red issues are off just a few cents to a nickel while there are dozens of issues up 1/2% to 1%.
Of course todays movement–and interest rates in general can be rapidly reversed when the Fed doubles their quantitative tightening next month (only 2 weeks away). Almost for sure we are going to see mortgage rates pop higher as the Fed sells or runs off huge amounts of mortgage backed securities.
I am sitting tight today–no buys or sells and remaining in 17% cash availability. I likely will start some modest buying tomorrow–not sure what issues yet except a very small position in the Argo Group (ARGO) issues discussed here recently–this would be starter positions only, because while the current yields are very tasty I would really like to see next quarters earnings release before taking a larger investment.
Sold half of my ARGO-A shares today and bought more RIV-A. As the months are ticking down to six left before retirement I find myself getting a bit more defensive in my holdings. I am pretty happy with what I have now with nearly half being term issues. I also bought a little more of the Pitney Bowes 4.625% bonds maturing in March 24. I was able to get them at 96.27 for YTM of 7.159%, pretty close to what my preferred shares pay but a bit higher in the stack, another defensive move I guess.