Well that was one heck of a close on the DJIA–a couple hours ago one would have thought it was a ho-hum day so going from ho-hum to down 600 is quite a wake up call for common stock owners.
It appears that investors are now taking negative economic number seriously for a change. Just Tuesday (I think) some readers and I were speculating a bit on whether GDP on Friday would boost interest rates higher–I commented whether a strong number would boost the 10 year over 3.2%. Lo and behold the 10 year fell a bunch today to as low as 3.11% today and now is right at 3.12%.
Today we have very soft new home sales numbers–that is not a surprise to us as we have commented many times recently. Higher rates and in particular crazy high prices are starting to bite pretty good. A few weeks (or months) ago this number would have been shrugged off by the markets. In a market where marijuana stocks such as Canopy Growth (NASDAQ:CGC) command market caps of $8 billion on revenue that equals 3% of the market cap–what could go wrong?
Well we can’t really forecast the future of common stock prices, but this market looks pretty sickly. As long as it doesn’t ‘bleed’ into the preferred arena I am more than happy.
As a almost strictly income investor it kind of feels good to watch the common stocks get spanked—us income investors have had our turn at spankings so this starts to even the score a bit.