Author: Innovative Income Investor

We now have had a couple up days in the S&P500–and just 30 minutes ago equity futures were green by a bit, but now (7:30 a.m.) the index is red–so maybe Santa is running out of gas.

The final read on GDP for the 3rd quarter has just been released at a surprising 3.2% which is an upward adjustment from 2.9%. Initial jobless claims rose just 2,000 – neither number indicates the softness that the Fed needs to change interest rate increases ahead. We are on the runway now for the 1/31/2023 FOMC meeting–so the initial data points indicate another 50 basis point hike–lots more data to come.

The 10 year treasury yield is fairly flat at this time at 3.68%–we had a couple days of 10 basis point moves which was plenty detrimental to income investors- so flat is good at this point–just give us stability.

PS Business Parks, which is owned by a Blackstone company, announced their results of their tender for preferred shares. A really quick look at the numbers shows that more than 25-30% of the shares will remain outstanding after the delisting of the shares. The last day of trading of the shares will be on or around 1/13/2023. The article is here.

I did nothing yesterday–barely looked at our accounts, but with a tiny amount of money available now I am looking for 1 more regional/community bank–with a current yield of 7-8% to buy today or tomorrow.

Equity futures are up darned near 1% this morning–maybe we will get a little Santa Claus rally going into the end of the year. The last few weeks have been a little tough for stocks so it wouldn’t be a huge surprise to get a little retracement for the next couple of days.

The 10 year treasury yield is off 3 basis points this morning after taking another too large of a jump of 10 basis points yesterday—that is 2 days in a row of 10 basis point jumps and it has put a cap on any gains for preferreds and baby bonds–I know my accounts have been red each day.

Yesterday I nibbled a bit on Merchants Bancorp 6.0% perpetual fixed-to-floating rate preferred (MBINO). Current yield is 7.26% with yield to 1st call of 17%. So this is my second regional/community bank in the portfolio–I have some CUBI fixed to floating and some of their baby bonds (CUBB). This is an area (smaller banks) where I decided I want some more exposure while I can get between 7-8% current yields. It is highly likely I will nibble another issue or two yet this week. You can see all banking and insurance preferred issues here–sorted alphabetically or by current yield.

Well it is -5 degrees outside – fortunately no wind yet. The forecast us for 5-10 inches of snow by this time tomorrow, but adding in high winds I suppose it will be -20 to -40 with the wind chill. This is Minnesota so anyone who is unprepared for the snow and the cold is just kind of foolish–the older I get the more I dislike the weather, but at least I am prepared. My brother was in Walmart yesterday and he said it felt like the ‘state fair’ with throngs of people stocking up–what silliness.