Author: Tim McPartland

Moody’s has downgraded a number of banks–once again on the worries about commercial real estate. Obviously this is not a new worry, but it continues to help put a lid on banking preferred stock price increases. I had very healthy capital gains in most all of my banking issues, but some of that gain has melted away–it it probably a good time to cut back some of these issues preserving decent, although reduced, gains. If you want to see the huge number of downgrades by Moody’s you can scroll through them here.

Equity futures are showing losses this morning with the S&P500 off about 3/4%–at the same time interest rates (the 10 year treasury) are back down to the 4% area – are they headed back to under 4%? We have big treasury auctions yet this week which may pressure rates-but honestly no one knows for sure so we just play the hand we are dealt.

I continue to watch CD rates and we have seen no ‘bump’ higher in rates since the last Fed Funds rate hike last week. I was hoping, based on history, that we would get up to 5.6 or 5.7% which would have made decisions easier as my CDs and Treasuries mature–I would take plenty at 5.7% for sure.

It looks like we have seen a short term peak in oil prices (west texas) around $80–I sure hope so since the last few trips to the gas station have been getting progressively more painful. I am paying $3.89 for unleaded in Minnesota –that high enough.

Well let’s get this show rolling and see if stocks can bounce up from a lower opening–there is a lot of FOMO out there and each time we have a small setback in prices buyers come in and drive prices higher.

The 10 year treasury is trading at 4.15% this morning after movements higher all week long–slow down!! As we all know preferreds and baby bonds will tolerate some level of higher interest rates, but they react best when the move is slow–a basis point or two in a day–maybe 5 basis points in a week. Movements of 10 basis points in a day can create investor pain. My accounts moved a little lower this week – July was an excellent month, but August is not starting out too well.

Today we have 2 large treasury bills being auctioned – 70 billion of 4 week and 80 billion of 8 week bills – we’ll see how those coming off.

Equity markets are a bit soft once again today and we’ll see if this is a turnaround Thursday – or is there more downside to come. Certainly equity investors have new reasons to sell – if an excuse is needed we have them. Potentially we will see some drifting today as we await the employment numbers. ADP showed hot employment for July – but this seemingly is meaningless as we saw last month when ADP showed hot numbers and the federal government showed softening numbers.

Did you see the excellent numbers posted by insurance company SiriusPoint (SPNT). Absolutely stellar. SPNT has a 8% cumulative preferred outstanding which almost certainly will be called in 2026 as it is a fixed rate reset with a very punitive spread of about 7.3% to be added to the 5 year treasury on 2/26/2026. I am pondering putting this on my watch list for the current yield of just over 8%. It is trading at $24.89–don’t want to pay over $25.