Markets are back to a calmer mood this morning with the S&P500 up just a bit, as is the NASDAQ. The DJIA is being buffeted by lousy earnings from Boeing–what a surprise (not). While markets may be calmer at this moment I wouldn’t expect that to continue–with the new administration we can expect disruptions weekly–whether it be a trade fight with some country or something related to immigration we will continue to have market disruptions.
I was amazed by dislocations in the utility issues yesterday–2 issues in particular got slammed. Vistra Corp (VST) closed off $54 at $138 while Constellation Energy (CEG) was off $75 to close at $275. Obviously these issues were tremendously overvalued–maybe they benefit from AI and data centers, but honestly the rise in prices in recent months was totally silly. CEG was up $80 or so this months–pure silliness. I am certain there were many other utility issues which fell hard, but those 2 caught my eye.
Today the FOMC meeting starts with the interest rate announcement tomorrow afternoon. This is followed up by GDP on Thursday and the personal consumption expenditures number on Friday. Certainly more than enough fresh data to keep markets active. Interest rates are bouncing a bit this morning now back to the 4.57% area–4 basis points higher.
Did you notice the earnings from WR Berkley (WRB) last night? Once again they were stellar–and a record. This insurer is so well managed that they just keep reporting record earnings. They made no mention of future losses from California wild fires, but I would think they will take some losses there–just a question of how much. WRB has 4 baby bonds outstanding. The WRB-E 5.7% issue is trading with a current yield of 6.12%–I own this issue in limited amounts, but could re-enter if I believe interest rates are going to be flattish.
Our portfolios had modest gains yesterday–2 very modest. Today I am once again just a ‘watcher’ of markets–kind of boring, but I am happy with the way I am positioned.
