Author: Innovative Income Investor

Equity futures are looking red by almost 1% this morning. The earnings season is upon us and the numbers are not looking great. Boeing (BA) just announced and they missed on the top and bottom line–nothing new for them as they have missed on a regular basis the last couple of years. Microsoft (MSFT) reported last night and other than their cloud business business is soft.

I am watching some of the banking company’s earnings–mainly because I own some of the regional/community banks preferred shares, but also watching the big banks. Capital One (COF) announced last night and their earnings per share were more than a dollar below the year ago quarter–the company is building reserves for future credit losses, which seems to be a common them. WesBanco (WES) also reported and 4th quarter earnings were about flat with a year ago–contrary to most banks they did not increase their provision for loan losses substantially. All banks are against comparisons that include PPP loan fees etc–and deposit lvels from government ‘free money’ programs

Interest rates are looking lower this morning–off 5 basis points to 3.42%. We’ll see if lower rates outweigh the downdraft in common shares to keep income issues green.

Yesterday was a slightly green day for us–not sure how many days in a row have been green–maybe the last 10-11, but all good things come to an end and today may be that day–we’ll see.

We have no economic news of interest today–we are saving that for the next 2 days when we will have a plethora of data–including an important inflation number (the PCE) on Friday.

Yesterday I trimmed a few of the gains in our portfolios—maybe adding around 1-2% to our cash position yesterday.

I have written about having little to no cash for the last month or two–virtually everything was invested. A fully invested position was the correct move and it yielded lots of gains, but now I am targeting a cash position of 10% or so–with money market funds paying a decent amount the ‘pain’ of too much cash will not be nearly as bad as it was previously when the yield was zero.

Equity markets are looking red this morning, although probably just a limited number of issues contributing to the losses–like 3M which missed on revenue and income.

Interest rates are off a couple basis points this morning at 3.5%. We have the PMI manufacturing and services index release at 8:45 a.m. (central)–these shouldn’t move the market (but who knows for sure).

Lots of earnings coming out including the community and regional bankers. Bank OZK released late last week–the report is here. Customers Bancorp (CUBI) will release tomorrow.