Below are press releases from companies with preferred stock and baby bonds outstanding. Additionally, news of a more macro economic importance may be posted. Earnings season has essentially ended so news will be slower until we get into mid April when some earnings will start to appear.
It appears to me that markets are ‘settling in’ a bit to the Washington chaos—focusing a bit more on actual economic data instead of moving on each bit of commentary from the administration. Maybe it is just me–but market movements are not dovetailing with what I read. Regardless of the market movements Friday and today I’m not feeling a high level of comfort—always waiting for another shoe to drop.
Today is a nicely green day for us–partially caused by the CHS preferreds going ex-dividend and then bouncing right back up after the exchanges marked them down by the dividend amount. Folks still want to own these issues, although I am expecting a weak quarter (or maybe year) for them. The ag and energy markets are so-so at best and they could be negatively affected by tariffs. CHS will survive just fine as they have for years—they have bad years—when you are in the commodity markets like they are you can’t win all the time. All in all the income markets are green today–the 10 year treasury yield is drifting a bit lower–now around 3 basis points lower at 4.28%–maybe just hanging out waiting on the FOMC meeting.
I have identified 2 additional issues in the current portfolio that are of such a size that I can nibble a few more shares so I will be looking for an opportunity to do a little buying–but just a little for now.
Another week is about to start and like almost every week there could be fireworks in the marketplaces. If it isn’t current economic data being released it is speculation on the future based on tariff policies etc. It is always something.
Last week we saw the S&P500 move lower by just over 2.2%–although without the nice 2% bounce in the index on Friday it would have been a much more negative week. It is not hard to imagine that this coming week will be relative wild as well with the FOMC meeting stating on Tuesday and then making an interest rate decision announcement on Wednesday.
The 10 year treasury yield ended last week about flat on the week–although on Monday it did trade down to the 4.20% area. Economic news during the week–in particular the consumer price index (CPI) should have been friendly to interest rates–but not so as bond investors wanted to be paid more for the risk they were taking. Lots and lots of talk everywhere about the government debt levels and it is making investors pretty nervous. Moods could improve it the Trump administration could show some actual savings from all of DOGE chaos.
Important data this week includes retail sales on Monday–is the consumer still buying and if not how sharply are they pulling back? Then of course the FROMC meeting on Tuesday/Wednesday–where no action is expected, but one never knows for sure.
The Fed balance sheet assets rose by $3 billion last week—expected. The balance sheet has fallen by around $60 billion in the last month–pretty near on target. If the Fed decided to help out interest rates they could readily chop the balance sheet runoff in 1/2 to $30 billion per month or so. I believe that if the economy continues to show softness they may well trim the run off prior to making the next interest rate cut–but who knows.
The average $25 preferred and baby bonds was down a measly 1 penny. The past 6 weeks we have seen prices trade in about a 20 cent range (on average). Investment grade issues traded off 3 cents, banking preferreds were off 2 cents, CEF preferreds moved 4 cents higher, while mREITs were down 6 cents. All in all a quiet week. The way I am looking at prices they should be 25 cents/share higher—but investors leaving the market are keeping prices under pressure.
Investors seem to think there are good bargains in the equity market today–whether there are ‘bargains’ or not we’ll know in a week or two. For myself it is always good to see up moves in equities as it keeps folks from tossing our preferreds and baby bonds out with the ‘baby’ as they head for the sidelines.
Economic news today was not very positive. Consumer inflation expectations came in hot, while consumer sentiment came in as most of us would expect–much lower than last month and lower than expectations. A little better (calmer) news out of Washington would go a long way toward repairing folks beliefs.
Interest rates are a bit higher-up 3 basis points at 4.31%. Regardless I put a small order in for some of the MidCap Financial 8% baby bond (MFICL) with a maturity in 2028. I own this issue now and it went ex dividend a couple days ago so it is trading around $25.26—but the ‘spread’ is wide so not certain I can get it with a limit order at $25.30–we’ll see. This BDC is managed by Apollo—and was previously named Apollo Investment. Earnings can be lumpy–here is there latest press release from February. Note that they hold mostly 1st lien loans–92% of assets–I always want to see 1st lien debt–versus 2nd lien.
Ok–enough for now–sit back and see if I can get a few baby bonds of MidCap. It will no doubt be an interesting afternoon in the markets.
Below are press releases from companies with preferred stock and baby bonds outstanding. Additionally, news of a more macro economic importance may be posted. Earnings season has essentially ended so news will be slower until we get into mid April when some earnings will start to appear.
