Well, it is that time of year for holidays. For some of us it is a time of memories of years gone by and family members who are no longer with us. For others it may be a time when families gather together and share small talk, gifts and a hearty meal. Maybe it is both a time for past memories and a celebration when gathering with others.
We no longer have any parents alive so we get to do the hosting of our 5 kids and spouses and 9 grandchildren (from ages 3 months to 21 years old). The adults no longer buy boat loads of gifts for each other–instead opting for a modest gift exchange determined by rolling dice. Of course the grandchildren get more gifts than one should ever expect, but regardless of my ‘old time’ values I can’t begrudge the overindulgence of money spent on grandchildren. I do ‘mourn’ those that have adversity in their lives right now–to those folks I hope they can find some solice and peace in this important season.
To all I wish you a Happy and joyous holiday as we all look ahead to the start of a new year.
Below are press releases from companys with preferred stock and/or baby bonds outstanding–or just news of general interest. Earnings season is pretty much over so we will have slow news days for a month or two.
I own 2 different issues of BrightHouse Financial (BHF)—I own the BHFAP 6.60% issue and the BHFAN 5.375% issue. As I surveyed holdings this weekend I said to myself ‘what the heck were you doing buying that issue’? This was in reference to purchased the 5.375% issue on October 1, 2024. I already was highly suspicious of owning perpetuals at that time and I paid a price for this ill advised trade taking a loss that could well have been avoided.
I have no problem with Brighthouse fundmentally, I simply want to own fewer perpetuals with inferior coupons (inferior at this time). Moves lower in interest rates in the next month or two are maybe not likely (of course we have to see the data)–with a new administration everything is hazy in this regards.
I noticed today that CD rates continue to drift very slowly downward–most at 4.30% – 4.40% on the 3 month at Fidelity and eTrade. Still a reasonable rate to hide out in until other opportunities arise–hopefully in short duration issues.
It was kind of a ‘wild’ week last week–so are we going to have more of the same this week? Actually this week could be a bit quiet with the Christmas holiday dead in the middle of the week on Wednesday–actually equity markets will close early on Tuesday at 1 p.m. (eastern time). Just remember that when volumes are thin movements could be exacerbated–but I am not expecting giant moves.
Last week we saw the S&P500 lose right at 2% on the week–but at the low the index was off by 3.75%. Of course we saw the big plunge on Wednesday as stocks fell all afternoon as Jay Powell gave what was perceived as a hawkish press conference. I personally didn’t see it as hawkish, but I didn’t have my rose colored glasses on–obviously I was in a minority. The index remains just 2.8% off of the all time high–it will be interesting to see if this index can set new highs–we may well see some folks locking down some profits in early January as we get closer to the new administration coming to power and bringing with it all sorts of uncertainty.
While equities were taking a tumble the 10 year Treasury yield was jumping–as high as 4.59% before settling down and closing the week at 4.52% which was 12 basis points higher than the close the previous Friday. Of course interest rates reacted to Jay Powell–investors had their expectations ‘reset’. The personal consumption expenditures (PCE) were released on Friday and were fairly tame which kept the situation from growing worse.
This week most of the economic data to be released,while important, is not likely to move markets much–if any. More likely is that the lack of faith in our Congress could set off selling–the CR passed late Friday doesn’t inspire great faith in the ability of politicians to begin to cut spending.
The Federal Reserve balance sheet fell by $8 billion last week at $6.89 trillion.
Last week, as one might expect, the average $25/share preferred and baby bond fell in price–by 28 cents. Investment grade issues fell by 37 cents, banks by 24, CEF preferreds by 46 cents, mREIT issues rose by 14 cents and shippers fell by 4 cents.
