Author: Innovative Income Investor

In an hour we finally get the announcement on the Fed Funds rate increase, but it will be 2 hours or so before we get all the news out–i.e. Jay’s presser.

This morning we had the ADP employment number come in very weak–for what it is worth 106,000 new jobs created versus a 190,000 forecast–obviously this is like throwing darts–anybody’s best guess. The ‘official bureau of labor statistics comes out Friday and there is a 187,00 new jobs forecast–we will see if the guessing (forecast) on this number is better than the ADP report.

The 10 year treasury is yield is off 5 basis points now to 3.47%–equities are off 1/2% to 1% in a very orderly sell off—I’m sure all the algo’s are ‘locked and loaded’ for 1 p.m. (central) and if the pattern is normal index’s will swing sharply both directions–all likely meaningless moves.

All my accounts are very flat today–I mean really flat. Not dooing anythings at all.

It is a rarity to have gains in preferred stocks like we had in January–the gain was in the 8% area on the average share. Personally I lagged the market by 1.5% as I have an allocation to CDs and shorter maturity treasuries. I am sure many outperformed me since I spend too little time jumping on bargains and rotating around to maximize returns–my market timing typically is bad–so no use chasing around.

Today is the day–I am more interested in Chair Powell’s news conference than in the rate hike announcement as it is a foregone conclusion that the hike is 1/4% – if it is more or less the markets will be very wild. So the unknown is how hawkish will the news conference come off.

Yesterday was a nice day with the S&P500 up 1.5% based upon economic numbers indicating inflation is trending lower. The 10 year treasury yield continues in a relatively narrow range–now (6 a.m. central) at 3.48% down 3-4 basis points from yesterday–I suspect we could see a breakout (down or up) of the 10-15 basis point range we have been in for a few weeks with today’s FOMC rate hike and news conference.

I am back to the do nothing mode. With a bit of cash now available for investing (and earning near 4% for waiting) I will wait for some shares to go on sale–if rates remain in this area and no bargains appear I will forfeit 2% or so on my cash holdings–oh well.

The employment cost index came in a little softer at 1% than the 1.1% expected while the Case Shiller home price index showed a 3.1% reduction –both playing into the scenario of a softening economy. What is bad news is good news today–equities are up 2/3% and interest rates are off just a tiny bit.

As I expected dividends and interest payments hit the Fido account already giving me a 4/10% bump today–no skill needed for that–just have some investments. eTrade is always late crediting payments so have to wait until tomorrow for that ‘bump’.

So I am in the position of now having a little cash ready to invest, but not having a setback in prices to deploy it–patience is the key I guess–as many have noted at least I am getting near 4% on idle cash–a damned sight better than a year ago.