Today was a solidly green day in preferreds and bonds–interest rates keep moving lower as the economy appears to be softening. It is nice to get a green day (although not very meaningful).
New home sales in particular announced yesterday were horrendous. 591,000 units against a forecast of 750,000. Is anyone really surprised–mortgage rates moved from 3% to 5.25% – seems obvious to me.
The 10 year treasury is now yielding 2.75% after trading as low as 2.71%–levels not seen April 14th. All of this is suggesting there is more and more conviction that we will see a recession in the next year. We will see what happens next month when the Fed starts quantitative tightening.
Today the minutes from the FOMC meeting reaffirmed 50 basis point increases in the Fed Funds rate in June and July–no surprise there and obviously markets have been well warned of the coming increases.
This week I only made 1 purchase – 100 shares of Liberty Broadband 7% preferred (LBRDP) at $25.50 – a current yield of 6.75% (plus or minus). This 100 shares adds to a position I established some time ago. This preferred is not optionally redeemable and must be redeemed in 2039. A very solid issue—I wrote about the issue 2 months ago here.
Of course I continue to watch for favorable pricing for more purchases, but I think there are many months ahead where we will get favorable pricing.