Author: Innovative Income Investor

Looking for a little relief – any relief – albeit probably temporary.

The 10 year treasury which hit 4.31% earlier this morning appears to be backing off a bit–now trading around unchanged at 4.23%. You would think after the run-up we have had in the last 10 days a little ‘backing and filling’ might be in order.

Regardless of market movements today I won’t be nibbling. I see some tasty buys out there (don’t we all)–but maybe we will see better (lower) pricing next week. On the other hand no one will ‘ring a bell’ when values bottom, stabilize and start moving higher. A bottom will only be known when we look in the rear view mirror and say ‘damn I should have bought more there’—of course with my minor cash position I couldn’t do dramatic purchasing.

Interest rates are up again this morning–the 10 year treasury yield is up 3 basis points to the 4.26% area–of course we are at levels not seen since 2008. Equity futures are off about .4%.

I’m ready for the weekend–it provides 2 days for mental restoration after getting beaten up by rising interest rates all week. The past week has been fairly brutal with my accounts hitting lows for the year–by just a little. On the other hand the end of the month is near so accounts will experience a bit of a boost when dividends and interest hit the accounts around the end of the month.

Today economic news is light with just the ‘index of common inflation expectations’ being released at 11 am (central). This index is released quarterly by the FED and is an ‘experiment’–a research project–whether it is meaningful or useful I don’t know, but it is worth paying attention to because I assume even though it is a research project the FED must look at it (at least a little?).

My appraisal work is slowing considerably — finally. Business is off 20% YTD, but all of that came in January and February. Home equity work has been heavy this year–essentially no refinancing. The ‘haves’ are still spending plenty on houses that are kind specific to older folks (like me)–patio houses (built on a slab–no basement). In my semi rural area new patio home subdivisions have sprung up and the upscale houses are typically $400,000 on the low end to maybe $800,000 for the larger very upscale properties. I just completed a report on a 2100 SF property with a cost of about $700,000 and I was shocked by all the cash deals happening in this new subdivision. Of course the ‘have nots’ have been on the sidelines for quite a while as there are no properties below the $200,000 area (unless you want a tiny condo). I am very much looking forward to having little appraisal work once the snow flies–with interest rates where they are once the snow flies in Minnesota we will likely see meaningful value drops and little activity. That means more time to get some long planned website work done.

The grind higher in interest rates (or should I say sprint higher) is painful – not just in a monetary fashion, but on a persons mentality – I am certainly glad I have no intention of using my investments anytime soon. My accounts hit new lows today–I knew it was coming–just a question of when.

Today we had a mixed bag of economic data. New jobless claims came in lower than expected. Philly Fed manufacturing index came in soft at a -8.7 versus 5 expected. Existing home sales came at 4.71 million units versus 4.7 million expected–a couple percent below the last reading. While leading economic indicators came in soft at -.4% versus -.3% expected – last month was flat.

This mixed bag of news didn’t keep the 10 year treasury from jumping 10 basis points higher to 4.23%. The 1 year bill is at 4.63% which is 4.57% higher than a year ago. All I can say is WOW!!!

Another day starting ‘green’ in the futures market–do we have a rally day or do equity prices dump like yesterday? Right now (7 am central) the S&P500 is up by just over 1/2%. The 10 year treasury yield, which closed yesterday at 4.13% is now at 4.10%–down 3 basis points.

Today we have jobless claims being announced–softness? We’ll see–probably not anything market moving. Philly Fed manufacturing index is on tap as well–forecasts are for softness. Home sales for September is slated for release at 9 am (central)–forecast is for 4.7 million versus last months 4.8 million. Leading economic indicators are going to be released and is forecast at -.3%–a large deviation could move markets.

Today is probably a quiet day for me–I keep nibbling and the more I nibble the more I lose. My accounts hit a low point 1 week ago and with a low cash position I see no reason to nibble more this week.