Below are press releases from companies with preferred stock and/or baby bonds outstanding-or just news of general interest. Now that we are very near to the end of earnings for the quarter ending 6/30/24 news will be somewhat slow once again.
Below are press releases from companies with preferred stock and/or baby bonds outstanding-or just news of general interest. Now that we are very near to the end of earnings for the quarter ending 6/30/24 news will be somewhat slow once again.
If anyone claims that stocks are too high they likely have been blaring the same message for months–if not years. It is not possible to predict even the next day movement in stock prices—one can make guesses, but that is all they are — guesses.
Today the rally marches on–for no particular reason other than there are still more buyers than sellers and the FOMO is very strong for folks who have CDs and treasuries maturing and just want a piece of the action. On the other hand no one will be sounding the bell when markets hit a high and some black swan swoops in and slaps investors down reminding them that markets go both directions. Obviously we had an example of this only weeks ago based on a singular data point.
The amount of money available to move into equities remains massive and growing larger week by week as folks earn fat interest payments (relative to zero). Trillions and trillions of dollars are available—not to say this will be all moving to equities, BUT once Fed Funds rates are cut we are likely to see meaningful amounts move.
I continue to have sizable balances in money market funds because they are paying me better than CD rates–my money market is paying around 5.3%.
Today I watch – that is all. Watching is sometimes the best thing to do.
I like boring—watching paint dry relative to equity and interest rate markets is always fine with me—I wish we could count of boring nothingness for years. Of course this is dreaming because it is in the interest of some market participants to drive prices way up and then bring it lower with a thud. The interests of ‘fast money’ folks seldom dovetails with the interest of us just trying to earn a fair return on our important dollars.
Last week we saw the S&P500 move in a range of 5324 to 5561 closing ner the high at 5554 which was up just over 4% from the week before. We are just 2 weeks out from the market panic, ‘the world is ending’, based upon singular miss on employment numbers. Well we are up greatly from the low that day of 5119–over 8% higher. The ’emergency’ rate cut called for by the Nervous Nellie’s would have been a great mistake and taken as a signal that there were greater problems (I.e. a huge global banker in trouble). A rate cut may be warranted, but not in a willy nilly fashion.
The 10 year treasury closed the week at 3.89% after trading in a range of 3.81% to 3.95% for the week. The close was 5 basis points lower than the previous week. Economic data for last week was pretty much on forecast–now particular the producer price index (PPI) and consumer price index (CPI). This week we don’t have any of the most important economic releases–but we do have the Fed chair speaking at the Jackson Hole meeting on Friday and I think he will continue to ‘set the table’ for a September rate cut–1/4% with 1/2% potential depending on the economic news released prior to the meeting (we will have employement, CPI and PPI released in September and will have the personal consumption expenditures (PCE) released on 8/30/2024).
The Federal Reserve balance sheet assets rose by about $2 billion last week–down occasional pause before the downtrend continues.
Last week we got a bit of a pop in the average $25/share preferred and baby bond as it rose by 11 cents. Investment grade issues rose 27 cents, bankers moved 19 cents higher. CEF preferreds fell 24 cents and mREITs were up 2 cents. Shippers were up a nickel.
Last week we had 1 new income issue price. mREIT Chimera Investment priced a new issue of baby bonds with a fixed coupon of 9.25%
Well we got lots of decent economic news this week and while common stocks moved around (mostly higher) more than I like to see, preferreds and baby bonds have traded pretty steady without crazy pricing (either up or down) and average prices are up a bit on the week (of course the collapse of B Riley issues wasn’t helpful).
The 10 year treasury is down about 4-5 basis points from the close last Friday, which is the way I like it. 0-10 basis points moves are nice and digestible, while 25 basis point moves are kind of scary—I’ll take boring rate moves all day long.
I had lots of dividends and interest hit accounts this week which has kept the portfolio moving gradually higher–just like interest rates I am happy with gradual moves higher–anything green is always good. All accounts are at all time highs (remember that we have not ever withdrawn a penny from a retirement account so comparisons are easy for us) and while returns pale in comparison to the S&P500 we are really happy with just hitting our meager 7% goal which is where we are at now.
Today I started a new position in the Rithm Capital fixed to floating rate preferred (RITM-B). This issue became callable yesterday and is now fixed to floating–at 3 month SOFR plus a spread of 5.64%–a current yield of right around 11%. I paid $25.03. Rithm also has another fixed to floating issue with the same call and floating date that would provide a slightly superior coupon (around 1/8%) trading at $25.20–the spread on that issues is 5.802%. Really a toss-up on which to buy, but I wanted to pay close to $25 in case of a ‘call’ soon (although a call would very much surprise me). Rithm is a mortgage REIT, but has a huge mortgage servicing business and they are spreading their wings a bit with various other asset management businesses. We’ll see how my entry position goes and determine in the future if I should add more shares.
