Author: Innovative Income Investor

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.

While we are only a few hours into the trading day even a super producer price index (PPI) report can’t move equities higher. The S&P500 moved up toward breakeven at 9:30 (central) sellers came in and said ‘let me out’ and down we go to now being off 3/4%. I mentioned days ago I was looking for some sort of ‘flush’ with massive volume to put in the short term low–don’t think we have had it yet.

Even with super PPI numbers the 10 year treasury yield is a bit higher–a couple basis points to be at 4.33%. For sure there is a lot more going on there than inflation–the bond vigilantes are keeping the treasuries feet to the fire. Initially I thought this would happen, but then I kind of backed off of that thought as rates were down in the 4.10% area. The bond market, like myself originally thought the Trump administration would actually be able to lower government costs–now folks are not so sure.

I’m doing nothing but watching the charts today–not that it matters to someone holding a portfolio like mine, but I still find it very interesting.

I looked at our portfolios—1 account was up 6 cents–the other 2 slightly green. Not much action to look at in our accounts.

Well let’s see if the markets can break out of this funk and move a little higher–not looking like good odds now.

Well we got the lower inflation number this morning as the consumer price index (CPI) came in cooler than expected. Did that help equities skyrocket higher? Yes for about an hour and then folks said get me out! The S&P500 is now around even on the day–after being up 1%–of course with this market we will have wait and see if there are dip buyers out there.

You would think the 10 year treasury yield would have fallen a little bit with the good news–nope. The 10 year treasury is dead flat at 4.30%. I don’t think that bond buyers are thinking the ‘fiscal house’ is in order yet–certainly investors are NOT going to be heavily swayed by a singular inflation number. Government spending isn’t contained–and maybe never will be so why would investors get real excited about 1 number. Maybe all congress will understand is a lack of buyers for all their debt.

Over on Yahoo Finance I got sucked into clicking on a link to this ‘story’ (below). It caught my eye because of ‘worst slumps in history’ verbaige. Yes it has been painful. Yes if you are 25 years old you think this is really bad–and no doubt it has been painful for many folks. So I checked the author–maybe 30 years old and writes novels. No blame for the author as he is just trying to make a living–but really TipRanks is not where I ever go for my economic news–just clickbait. Well if this pullback is one of the worst slumps in history I wonder what all the bear markets we have lived through would be called?

S&P 500 Faces One of Its Worst Slumps in History – Is Trump’s Trade Policy to Blame?

Yesterday I did manage to buy some of the Priority Income Fund 6.625% term preferred (PRIF-F). It wasn’t easy and overall I had to pay more than I wanted at $24.60 and $24.66, but regardless it still fits in my wheelhouse with a potential redemption in the next year and a relatively short time frame even if it is not redeemed early. Just looking at the issue it has jumped and now is trading at $24.98.