News doesn’t get much bigger than it did earlier today when we had a gaggle of economic news.
GDP was released at -.3%. Its been a long time (about 3 years) since we have had to look at a negative number. Forecasts were modest at a +.4%, so the number wasn’t a total disaster, but it doesn’t bode well for the next few quarters as we look at potential for severe tariff disruptions.
ADP came in with a really soft employment number at 62,000 jobs added—about 1/2 of what the forecast was at 120,000. Of course we have the ‘official’ government employment report on Friday so we will see where that takes us.
Then we had the personal consumption expenditures (PCE) release which was more or less around forecast–although inflation was down a bit–prior to the effects of tariffs which we will see what happens there very shortly.
The 10 year treasury is barely moving and trading around 4.17%—preferreds and baby bonds are off a tiny bit as the soft equity markets get drug lower, although well off the bottom from an hour ago.
Yesterday I started a position in the Gabelli Global Utilities Puttable Preferred (GLU-B). This is a $50/share issue. I bought just 100 shares to start with and then added 25 shares at Fidelity–which at that moment was the maximum Fidelity was allowing (mother Fidelity-always watching out for us). When I get more cash I may add to this very conservative position.
I think GDP Now forecast had a much lower prediction, of about -2.3. So -.03 ( and then there will be revisions) eh. As to what it means say for the third or fourth quarter, my guess probably nothing.
Looks like the dow and S&P closed higher. Perhaps the expectation at least for some traders is for trade deals and a tax cut will occur. Probably at some point interest rate cuts too. FWIW reminds me of remodeling, during the process things look like a mess, but must wait for the remodeling to be complete before assessing whether it was worth it. That is my pep talk from the perspective of a long term investor. Will go back to primarily reading mode.
Good way to put it Tacitus. I had to be out of the office for 4 hours and was amazed at the bounce, but I am afraid there is still plenty of turmoil to come.
There is always turmoil to come.
I hear you Tim.
Last few weeks, I have been out of contact for some half days and a few times for several days at a time (no cell reception, nothing). It is usually surprising when I finally I get back in range and can see the numbers.
Current situation is like stepping through the looking glass
Crazy thing is that I am up significantly from the first of the year. Been a bit of a roller coaster, but keep ending up OK.
Hello Tim – With the below stated on QOL, what’s the attraction with GLU-B? How in the world do you know what rate you’ll get in future periods and what is that rate based upon or am I missing something? Thanks!
Cumulative distributions will be paid quarterly on 3/26, 6/26, 9/26, & 12/26 to holders of record on the record date that will be on the fifth preceding business day of the payment date (NOTE: the ex-dividend date is one business day prior to the record date). The Dividend Period beginning on the Date of Original Issue, which constitutes the first Dividend Period, together with the next three Dividend Periods, are referred to herein as Year 1, the next four Dividend Periods are referred to as Year 2, and so on. For the Dividend Periods occurring in Year 1, quarterly dividends to be paid at an annualized rate of 7.00%. The Board will announce within 30 days prior to the end of such Dividend Period a fixed annual dividend rate that will apply for the Dividend Periods occurring in Year 2 and Year 3. During the last Dividend Period occurring in Year 3, the Board will announce 30 days prior to the end of such Dividend Period a fixed annual dividend rate that will apply for all remaining Dividend Periods. In no case will the annual dividend rate be less than 4.00% or greater than 7.00%.
Rocky Mountain Hiker–sorry I don’t use QOL–but the rate is now fixed at 5.20% forever forward as they are through with the times stated for resetting. see some history here.
https://innovativeincomeinvestor.com/security/gabelli-global-utility-income-trust-series-b-cumulative-puttable-callable-preferred-shares/
Ah, that clears it up! Thank you!
Thank you for correcting my understanding. I had thought June 2025 was the final put date.
As written, all named Dividend Periods have passed, so I consider GLU-B to now be a perpetual @ 5.20%. That being said, GLU arbitrarily reset the coupon to 5.20% in the past as a way to minimize the number of shares put back to them. I’m sure they can only do that again if they increased it. They cannot decrease it. So what you are buying is a 5.20% perpetual with great coverage that you can put back to the company at your discretion, not theirs, every 6 months until 6/26/27. All the flexibility is in your own hands.
oops! Tim beat me to it….