Innovative Income Investor | Innovative Income Investor

Ready to Wrap Up This Week

Well yesterday was wild in equities–the S&P500 moved lower virtually all day hitting a low of 3764 before reversing and clawing back some of the losses, closing at 3822 which was a loss of almost 1.5% on the day. Futures are up 1/3rd% at this moment and with thin trading volume expected today there is no telling where we end up. Markets will be closed on Monday.

The 10 year treasury yields didn’t move too much much at all yesterday–closed at 3.67% and now is at 3.70%. With the personal consumption expenditure (PCE) price index due in 5 minutes we’ll see what happens–we could see lots of movement.

Yesterday I didn’t do any investing — no buying or selling — maybe this morning I will buy, but not feeling any pressure at all to do anything. Today I have to run out and buy 1, yes 1, Christmas present–around our house the grand kids make out well while the rest of us do without.

Headlines of Interest

Below are some press releases from company’s that have preferred stock or baby bonds outstanding–or general news of interest.

Freddie Mac Issues Monthly Volume Summary for November 2022

Wintrust Financial Corporation Announces Fourth Quarter and Year-to-Date 2022 Earnings Release Schedule

iMedia Brands Signs Agreement to Sell Three Buildings For $48 Million

Freddie Mac Announces Replacement Rates for its Legacy LIBOR Contracts

XOMA Declares Quarterly Preferred Stock Dividends

Hennessy Advisors, Inc. Partners with Stance Capital, Completing its 11th Asset Purchase

Fannie Mae Announces Replacement Rates for Legacy LIBOR Products

Mortgage Rates Edge Lower

Freddie Mac has reported that mortgage rates on the 30 year mortgage moved just a bit lower to 6.27% which is just 4 basis points lower than than a week ago–the high for the cycle has been 7.08%. The 15 year mortgage was up 15 basis points to 5.69%–the high for this cycle has been 6.36%

I watch rates just to get a sense for some general economic conditions (or potential conditions). Right now in the midwest sales of homes are getting pretty sparse–and obviously refinancing’s are few and far between although there is a far amount of activity in home equity loan applications. These are my own observations in Minnesota now, but I suspect that it mirrors the country.

Property values (single family residential) are close to stable in Minnesota–marketing times are longer, but with the lack of inventory values have held up–subject to change at any time. Almost always values in the midwest follow the east and west coast–both on the way up and the way down.

Freddie Mac data is here.

B Riley Shares Getting Hammered

The common shares of B Riley Financial (RILY) are getting smacked hard today. Shares are down $3.40/share now at $32.08.

I don’t see new news for them, but Core Scientific–a crypto company which owes RILY $42 million did file for bankruptcy yesterday. That filing is here.

There doesn’t appear to be any reaction in the baby bonds at least thus far. Be careful out there.

Will Santa Keep Visiting?

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.