Author: Innovative Income Investor

Time to wrap this week up. It looks like the indexes are likely heading lower again today with the S&P500 futures down about 1% right now.

Yesterdays S&P tumble of 2.5% was quite brutal and it appears maybe for the 1st time investors are accepting that we are not at the end of the tightening cycle–or if we are we don’t really know it. At the same time interest rates are telling us a very, very soft economy is just ahead–the 10 year treasury is at 3.46% right now.

Well I continue to sit on my hands, although yesterday I started back on my due diligence of regional and community banks. I continue to hold fixed-to-floating shares (CUBI-F) in Customers Bancorp (CUBI) and some of their baby bonds (CUBB). This is a target rich environment for 7% yields. My hesitation is because I need to trim some other holdings to buy some of these issues—and each time I review the holdings I don’t find shares to sell.

Well I am off to drive over 50 miles of snow and ice here in Minnesota–as a youth this was no big deal–as a old codger I would rather stay in my office, but duty calls so I have to go.

The hawkish tone of the Fed is coming home to roost today in equities and I think we can take J Powell at his word. As it stands today – another 50 basis point rate hike on 2/1/2023 (my words not his).

The S&P500 is off a giant 2.5% at this moment–and at the low of day.

Todays unemployment claims number was below expectations–employment would appear to be remaining relatively strong. Other economic signs were kind of weak–but far from falling off a cliff. But through all these economic signs the 10 year treasury is off 4 basis points around 3.46% as the bond market continues to see weakness sometime in the future. Plenty of cross currents in these markets.

Just ‘eyeballing’ preferreds and baby bonds they appear to be generally red–but more of the nickel and dime stuff–nothing serious. The last time I said this mid day prices hammered lower in the afternoon so hope this isn’t jinxing things for the rest of the day.

Well let’s see if the markets can turn a bit higher for the rest of the day–but as I type the S&P500 is at the low of day.

Well we had the main shows for the week yesterday and Tuesday with the CPI and the FOMC rate hike. Today we have a gaggle of minor reports which shouldn’t move markets much, but one never knows anymore.

Right now equity futures are down over 1% and interest rates have ticked down by a few basis points to 3.45%–it will be interesting watching how interest rates react to having no super major news for a few weeks–maybe we will just drift for weeks–that would be welcome.

I continue my streak of doing nothing (as far as selling or buying)–I did open my accounts to see that they were a bit ‘green’ yesterday–a tiny bit. December is a big month for my accounts for dividends and interest so I have that to look forward to for the end of the month. I doubt I will do anything to speak of as far as selling and buying for the balance of the month–it seems odd to be fully invested without reason to buy or sell.

Well let’s get this day going and see where we end up.