Author: Tim McPartland

Equities couldn’t make a stand at all today – each small rally brought more sellers out–I guess tough talk from Powell (although expected) put a little fear into folks.

Interest rates didn’t take a breather either–stuck at 4.48% all day long–it wasn’t helpful that 1st time unemployment claims were quite a bit fewer than expected.

I did weight in on a 5.70% CD (1 year) today–seems like these are going to go higher from here. The higher rates go the more competition will be for the individual investor money for certain.

My accounts were all RED today–no surprise, but the dollar value of the RED issues wasn’t too bad – given the level of treasury bills and CDs in the account the spanking is fairly mild.

So we will have to see if the market follows through tomorrow or not–my guess it will be a soft open and then bounces. We’ll see!

The rate hike/no hike announcement yesterday was exactly as I expected – no hike, but tough talk on the future. Anyone who expected anything but what we got simply hasn’t been paying attention. Inflation, while much tamer than a year ago ticked higher last month–and may well be high again this month. GDP is forecast to be in growth mode for the year and employment remains relatively strong.

The 10 year treasury was steady after the no hike announcement–BUT this morning after time to reflect on the announcement further is interest rates are on the move higher–now at 4.46%, up 10 basis points from yesterdays close. Remember that as income investors interest rate movements higher don’t necessarily hurt us immediately–it is more the speed of the move than the direction. I like to see moves of 2-5 basis points–10 is too fast–I hope it backs off a bit during the day or we will have some pain in preferreds and baby bonds.

This morning we get the 1st time jobless claims–forecast at 225,000–we need to see this number rise–Jay Powell needs to see the employment numbers rise. Additionally we need to have the leading economic indicator remain soft–I haven’t looked over the construction of this indicator–maybe it is a meaningless stat at this point in time. The number has shown contraction for 16 consecutive months–seems out of step with reality.

Carecloud (CCLD) released a operations update yesterday in response to the shellacking their preferred shares took on Tuesday. The preferreds bounced back nicely but only a fraction of the fall they took on Tuesday. Not something I would ever be involved in – I am way too conservative for involvement.

Yesterday I bought 4 shares (yes 4) of the RiverNorth Doubleline perpetual preferred (OPP-B)–this came from a good til cancelled buy order. I though I had my gtc order set at a lower level–obviously not, I will move it 25 cents lower today as I want better bargains than the one I got on 4 shares yesterday.

This morning I see JPMorgan has a 5.70% 1 year callable CD available (on Fido)–with interest rates popping we may have very tempting CD’s and treasuries out there–is 6% in out future?

Well yesterday the 10 year treasury hit a high of 4.365% which is where it closed–this morning it is trading a basis point lower. Honestly it doesn’t matter much because it could easily be 10 basis points higher or lower before the day is out. The FOMC will announce that they are skipping a rate increase this month, but Jay Powell will be very straightforward in his presser that they stand ready to raise rates in the future–we will see what the tone of this press conference brings us.

Equities are a little green this morning–1/4%, but once again this could change dramatically in the next 8 hours or so. Whether the market flies straight up or straight down there is nothing I can do about it – it will do what it wants.

Yesterdays disaster in the preferred stock arena was the Carecloud 11% perpetual preferred (CCLDP) and to a somewhat less degree the Carecloud 8.75% perpetual (CCLDO)–down around $8 and $2.50 respectively. Carecloud was previously Medical Transcription and I never understood why their preferred shares traded so strongly. I see no obvious news for the sell off BUT CCLD trades at just over $1/share with a market cap of $17 million–that alone is a huge warning sign. Obviously you had to be an aggressive investor to be holding these shares. Well we will see if these shares bounce back or not–for the holders I hope there is a bounce back, but it is hard to see it back to $25 with the common trading just over $1.

It’s the normal gig today–do nothing in the markets–just watch. I do have 4 good til cancelled orders in – 3 to buy and 1 to sell–doubt any of them will execute since my limit price is pretty low on the buys and the opposite on the sell. The sell order is one of the community bankers which I current have about a 7% gain in (5% capital gain and 2% dividend)–I’d like 2% more. The gain has been as high as 10-12% but I let that slip away.

Well let’s sit back and enjoy the show today–I hope it surprises me and is a quiet, boring day.