Pretty Quiet Waiting on Inflation Data

We are awaiting economic news at 7:30 am (central) and markets are currently pretty quiet.

The personal consumption expenditures (PCE) is forecast to show year over year inflation at 4.7% which would match last months reading. The core reading is forecast to show a .4% rise compared to .6% last month. This number could put the fed in a real pickle – a hot number begs for more interest rate increases, but with the banking situation a rise of more than 1/4 basis point at the next meeting (May 2-3) is pretty dangerous.

Here is the balance of todays economic news.

As with most days I have no plans to do anything at all today–I have just the 1 open good-til-cancelled buy order and it is more than $1 away from my buy price.

Today we have a blizzard warning in Minnesota – I have had it with this winter–March 31 and we still have a 4′ high pile of snow at the end of the driveway. Certainly we will get no sympathy from the folks out west in the mountains. In mid January we spent a week in Palm Springs–one of our favorite spots and with the benefit of hindsight I wish we would have delayed until February or gone again in March.

Well let’s get this day rolling see if things get crazy or remain calm.

Headlines of Interest

Below are some press releases from company’s with preferred stock or baby bonds outstanding–or just news of general interest.

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Mortgage Rates Decrease for the Third Consecutive Week

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XOMA Acquires Cashflow-Generating Asset for its Royalty and Milestone Portfolio

PS Business Parks, Inc. Announces Expiration and Results of Tender Offers to Purchase for Cash Any and All of its Outstanding Preferred Securities Described Below



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Chicken Soup for the Soul Entertainment Announces Proposed Public Offering

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Chicken Soup for the Soul Entertainment Moves Fourth Quarter and Full Year Earnings for Fiscal 2022 and Analyst and Investor Conference Call to Pre-market Opening on Friday, March 31, 2023

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RenaissanceRe Schedules First Quarter 2023 Financial Results Conference Call

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Pebblebrook Hotel Trust Schedules First Quarter 2023 Earnings Release and Conference Call

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Arch Capital Group Ltd. to Report 2023 First Quarter Results on April 26

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AM Best Withdraws Credit Ratings of Equitable Financial Life and Annuity Company


Kite Realty Group Trust to Report First Quarter 2023 Financial Results on May 2, 2023


Sachem Capital Reports Record 2022 Annual Revenue of $52.3 Million and Net Income Attributable to Common Shareholders of $17.2 Million or $0.46 per Share


Fortress Biotech Reports Record 2022 Financial Results and Recent Corporate Highlights

iStar Announces Final Consolidation Ratio in Connection with Safehold Merger

iStar Announces Final Consolidation Ratio in Connection with Safehold Merger

This Economy Remains Strong

There are plenty of problems in our economy, but there is little showing up in the economic releases.

Today we had 1st time unemployment claims under 200,000 again and continuing claims are at 1.69 million–pretty steady over the last number of months. Sure we have seen layoff notices from a plethora of tech companies announcing sizable layoffs, but in the big picture these have not been substantial.

The final read on 4th quarter GDP was revised down to 2.6% from 2.7% so no major weakness showing. The Atlanta Fed is showing a 3.2% number for the current quarter on their GDP Now model—where is the weakness?

Normally I would look at the bond market for direction–but with the banking fiasco this is probably pretty meaningless in term of economic growth forecasting. Equities remain kind of strong–are equities right this time? Equities are not forecasting much economic weakness–so we continue to just guess on what is ahead – everyone has an opinion.

Yesterday I bought an add-on position in the RiverNorth Opportunities Fund 6% perpetual preferred (RIV-A). Someone did a good sized dump on these shares and it fell to my GTC buy order–hit a low around 22.39 on multiples of normal volume. 6.61% current yield on a CEF A1 rated issue–I’ll take it and will take some more if it falls.

I have no plans for today–but I have a GTC order in on the Gamco (Gabelli) Natural Resources 5.2% perpetual (GNT-A)--now trading at $22.71 for a 5.72% current yield. Low odds this will execute because my order is at $21.50–but I’m ready if someone want to dump some shares.

Headlines of Interest

Below are some press releases from company’s with preferred stock or baby bonds outstanding–or just news of general interest.

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Pending Home Sales Grew for Third Straight Month, Up 0.8% in February


SL Green Realty Corp. to Release First Quarter 2023 Financial Results After Market Close on April 19, 2023

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Global Partners Announces Plan to Expand Retail Operations into the Houston Market

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Atlantic Union Bankshares Corporation To Release First Quarter 2023 Financial Results

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Pebblebrook Hotel Trust Completes Sale of The Hotel Colonnade Coral Gables, Autograph Collection

Synchrony to Announce First Quarter 2023 Financial Results on April 19, 2023

Synchrony to Announce First Quarter 2023 Financial Results on April 19, 2023

A Day to Party!!

Well at least looking at the equity futures it must be party time–the banking crisis is resolved and summer is almost here (although it is 9 degrees here in Minnesota)!!

Of course this is so much baloney – reading comments on this website there are plenty of opinions on what is the next issue–commercial real estate, debt ceiling, consumer credit or a plethora of other potential issues. We all know they are out there and we all know they will eventually have to be dealt with – but undoubtedly they will be not be dealt until something bad happens.

As individual investors we have to do the best we can to deal with what we can control – not to fixate on what we can’t control. One thing I can control is my investments – and right now I wouldn’t want to own any preferred stock or debt of commercial real estate related company’s. This means commercial mortgage REITs. I now don’t own any shares at all, although I did through January, but out they went in February. This would include Arbor Realty (ABR), Ready Capital (RC), KKR Real Estate (KREF), TPG Real Estate Finance (TRTX), Acres Commercial (ACRE) and others. The remote work movement is here to stay–and locally we are seeing numerous large employers not renewing leases as they intend to remain remote and have no need to lease the space.

But it is not only the mortgage REITs , but the office REITs such as Hudson Pacific, Vornado etc. that will have big, big issues. Already their preferred shares are trading way, way down. Hudson Pacific preferred closed at $9.52 yesterday. The Vornado issues are all trading in the $10-12/share area. I think some of these will be buys in the future–but this will take years to play out and there is no use trying to catch the falling knife–why buy something today for $10/share when you might get it at $5 later this year or in 2024 or 2025.

I did nothing yesterday except wish I would have bought more Jackson Financial 8% preferred (JXN-A). When I wrote about it on Monday I had bought hundreds (not thousands) of shares–either way a 13% gain in 2 days is very nice, but I suspect there will be setbacks and one can add shares if desired. Shares are now at $23.94 and I would not be surprised to see them at $27 in a month or two–but on the other hand I wouldn’t be surprised to see the share price at $21 if we have an ‘event’ of some sort. We’ll see.

Today I doubt I will do anything, although I have 2 utilities I am looking at – both issues I have current positions in. I’ll write about them in the next week. My plan continues – hold bunches of CDs and treasuries in the 5% area, buy issues of decent quality when the opportunity presents and recycle CD and treasury money on maturity over the course of 3 months to 2 years (although whether some goes back in CDs or into preferreds will be determined based on conditions at that time).

Headlines of Interest

Below are some press releases from company’s with preferred stock or baby bonds outstanding–or just news of general interest.

Slow news day today-again.

Diana Shipping Inc. Announces the Filing of Its 2022 Annual Report on Form 20-F


LifeMD Declares Quarterly Dividend on Series A Cumulative Perpetual Preferred Stock


SL Green Signs Full Floor Lease with Palo Alto Networks at One Madison Avenue

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TravelCenters of America Confirms ARKO Corp. Proposal is Not Superior to the Previously Announced BP Transaction

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Harrow Announces New $100 Million Secured Credit Facility with Oaktree


Sachem Capital Sets Dates for 2022 Earnings Release and Conference Call

Waiting for the Next Shoe to Drop

Each day we hear less and less on the banking situation–is it gone? Resolved? Not a chance.

All through the financial system we are going to see band-aids being applied to deep problems–kick the can down the road some more, just like we have been doing since 20 years ago (or more). Regulators? I have little faith in the regulators of banks and insurance company’s – at least on the federal side of regulations – most insurance company’s operate under some sort of state regulators and maybe there is more nerve there to regulate–maybe.

So as we wait for another ‘shoe to drop’ it is near impossible to have huge amounts of confidence in investing–on one hand if you wring your hands and hold cash (or cash equivalents) you may miss out on some huge capital gains and very tasty current yields–on the other hand if you invest heavily and an ‘event’ happens you could get burned badly.

Yesterday I bought a position in the Jackson Financial 8% fixed rate reset preferred (JXN-A) and I added to my Lincoln Financial 9% preferred (LNC-D). These are small positions – 100’s of shares – not 1000’s of shares. I’m pretty conservative – and the odds I am going ‘all in’ on these issues (or similar issues) is exactly ZERO. I may add more in the next month or two, but I really want more data–i.e. earnings reports etc. I would rather look back and see that I missed some gains than to wake up some morning and find an ‘event’ has rocked the financial sector. It takes only 1 bad security to inflict massive portfolio pain on investors so I encourage folks to use caution and ‘leg in’ to positions.

So today we have a number of economic reports hitting starting in 90 minutes with retail and wholesale inventories at 7:30 a.m. followed up by the Case Shiller home price index and the FHFA home price index at 8 a.m. (central) and consumer confidence at 9. Market movers?–not likely too much. Fed vice chair Barr testifies to the house today–supposedly on banking, but who knows where this goes.

Well markets are quiet with little movement n the S&P500–let’s get it going and see if we can keep it quiet.

Headlines of Interest

Below are some press releases from company’s with preferred stock or baby bonds outstanding–or just news of general interest.

Slow news day today.

View Press Release
View Press Release

Energy Transfer to Acquire Lotus Midstream in a $1.45 Billion Transaction


Nationwide Survey Finds 48% of Americans Have Less Than $1,000 in Savings, While 20% Have No Savings at All

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ARMOUR Residential REIT, Inc. Announces Guidance for April 2023 Dividend Rate Per Common Share

Invesco Mortgage Capital Inc. Announces Quarterly Common Dividend and Provides Update on Estimated Results of Operations, Portfolio, Liquidity and Book Value

Invesco Mortgage Capital Inc. Announces Quarterly Common Dividend and Provides Update on Estimated Results of Operations, Portfolio, Liquidity and Book Value

Fannie Mae Releases February 2023 Monthly Summary

Tweaking the reCaptha Security

We’ve had a couple folks note that the reCaptha security can sometimes be difficult for them.

I want to make everything as easy as possible for folks, but I have to try balancing easiness with the need to keep the ‘bots’ off our site. So far (in 6 years) I have been quite amazed to find very little bot action getting through–and believe me they are trying every hour of every day–I have the stats and they are crazy numbers hitting the site daily.

I have made a tweak to the security and we will see where we go from here. I will observe the spam and bots and see if it increases–if I see a bunch of bots getting through then I will have to re-tweak, but if not we will leave it with new settings. I do not want to be specific with the changes I have made (or will make) because I don’t want to attract spammers.

Stepping In for a Buy on This 9.36% Yielder

This morning I have initiated a position in Jackson Financial (JXN) 8.0% fixed-rate reset preferred (JXN-A).

As I have noted many times I am kind of full up on treasuries and CD’s at the 4.9% to 5.40% area and now is the time to try to buy some fairly solid high yielders to balance the portfolio out.

This year has played out like this – Great gains through January. Sold considerable amounts during February locking in some nice capital gains and started moving into more CD’s and treasuries–then we had the banking crisis which meant little activity. A week ago I started searching for issues that were fallen angels. I added shares of the Tricontinental 5% preferred and now I have added some Lincoln Financial 9% preferred and today the Jackson Financial 8% preferred. I have plenty of dry powder as I have had CD’s and treasuries mature that I bought in September

This issue (JXN-A) came to market on 3/6/2023–just before we had the ‘banking crisis’ appear and being an insurance issue (annuity) the company has been painted with the typical banking and insurance paint brush. This means that the preferred shares were slammed and now trade around $21.30 for a 9.36% current yield. The yield to 1st call (3/30/2028) is just over 12%. This issue is just 1 notch below investment grade from both S&P and Moody’s.

Over the weekend I did some digging on this issue and I find the financials very acceptable–although very complex, because the company does hedge their investments so you have hedging gains and losses which tend to muddy the picture but this is preferred to many of the banks which did not hedge their long duration investments and now regret it. The company has almost $300 billion in asset under management – so a pretty large company.

Now does this mean I think the banking crisis is ended? No, but if I wait to see if it has 100% this bargain will no longer be there – it will be trading much higher. This is a starter position and I may or may not buy more–don’t know until I see more data. This is not a recommendation – as always.