Author: Innovative Income Investor

These market movement are a bit stressing and today a little bit of pain is being felt in preferreds and baby bonds. Our accounts are off a bit – really wiggles more or less–the Fido account shows the month being off <.01%—thats a really nothing number. I don’t recommend watching portfolios this closely, but it is what I do and have for decades (at least since the beginning of the internet-and even before the internet with a direct dial up phone link to the WSJ).

The 10 year treasury has bounced 5 basis points to 4.31%–we up 20 basis points since the low point on Tuesday.

The S&P500 has been all over the map–spiking sharply higher when the Mexico tariff pause was announced–the spike lasted about 2 minutes when the fast money bailed and down we go–now off 1.80% on the day–at the low of the day.

Now I am expecting some sort of announcement on Canada yet this week–for better or worse-who knows?

Certainly I won’t be involved in markets today–too much noise and I can’t really buy anything except the old standbys (CD and MM). I have not sold a thing and don’t plan to–more likely I would add to a short duration baby bond–something that has fallen a quarter or 50 cents.

Jobless claims came in today about where expected–maybe even below forecast. The Challenger lay off report came in higher than we have seen for years–at 172,000 versus last month around 50,000. DOGE related maybe.

Well I will get back to watching the ‘show’ and hope for a bounce.

After some difficult days in equities it looks like markets are ‘digesting’ recent moves–equity indexes are moving in a relatively narrow range–up and down now.

Interest rates are kind of doing the same with not much movement and just hanging in the 4.20% to 4.25% area, although this is a fair amount higher than the low of 4.11% 24 hours ago.

We had the ADP jobs report released this morning at 77,000 new jobs created in February–much weaker than forecast of 140,000. As folks know I concluded long ago that employment was one of the most important indicators of economic strength/weakness. No doubt this is weak and when we see the ‘official’ government numbers on Friday we will have a darned good hint at where this economy is going.

As folks have been noting KKR is selling a mandatory convertible $50 preferred which folks can read about here. I’m not personally fond of convertible issues–for no particular reason-guess I just like plain vanilla preferreds.

Also Highland Opportunities and Income Fund (HFRO) has just completed an exchange offer for a new series of preferred stock. It is a 5.375% coupon–same as their HRFO-A issue which is trading at $16.76 now for a current yield of 8.02%. Folks really hate this closed end fund. The ‘B’ issue will be listed on the NYSE soon.

Well I’ll do nothing investment wise today–boring, but preferable to doing something stupid.

Well another ugly day–I thought just maybe we would have gotten a ‘sell the potential tariffs’ and buy the actual tariffs–but I guess folks still are feeling threatened today by the future. We have gotten a couple of dead cat bounces today, but with the S&P500 down 1.6% as I type this one can’t predict the balance of the day. I am thinking we will have (or maybe need) a giant ‘flush’ yet today to weed out the sellers. Who knows?

With the 10 year treasury off another 5 basis points to 4.13% we are seeing just minor damage to portfolios–contrary to yesterday we are seeing red–I never like red but with the equity prices falling so hard it is just a matter of time until preferreds and baby bonds get pulled down as the baby goes out with the bath water.

I did buy a few CDs this morning at 4.35% (3 month) just because money is stacking up and I need to keep it at work somewhere. Still have no intention of buying prferreds or baby bonds now, but I will be watching my current holdings to see if I can get a bargain (bargains on a term preferred or short duration baby bond is defined differently than perpetuals to me–a drop of 50 cents in an issue that matures in a year or two may present great opportunity). Perpetuals are off the table for now (this week).