Innovative Income Investor | Innovative Income Investor

9 PM Central Time – Global Trading

After a rocky start to global stock trading tonight, China, Japan and U.S. stock futures have all turned nicely higher.

The S&P500 and DJIA futures are both up near 1%–not a giant move higher, but maybe one which is signaling that the world isn’t going to end (of course we all knew that–but are waiting for the markets–to get a bit rational).

Gold is higher, crude oil has turned higher as well.

Thus far we have seen no publicly announced central bank action, but all are thought to be at the ready if necessary. No doubt the ‘crash protection teams’ are at the ready.

Reminder–Seaspan Corp is now Atlas Corp and Tickers are New

As a reminder Seaspan has reorganized and is now Atlas Corp (ATCO) effective 2/27/2020.

We have updated individual security pages and are in the process of updated spreadsheets.

Note that the 7.125% baby bonds (SSWA) are being delisted, but the company has announced plans to call the issue on 10/10/2020. The last day of trading is 3/9/2020.

End of Day Rally Felt Good–But Fed is in a Box

Seldom do any of us say that we feel good with a 356 DJIA loss, but it sure felt good.

Unfortunately I am afraid the Fed has put themselves in a ‘box’–back to the same old thing where the Fed yaks and the market prices in a rate cut. I guess everyone can have a good weekend, before we are back at the computer Sunday night.

I think we are going to see coordinated global interest rate cuts Sunday night–with the 10 year treasury at 1.12% a 1/4 point cut would still leave Fed Funds above it. I hate the thought of the rate cut (I’m talking my book here)–I don’t think it is helpful, plus us income investors will see our meager 1.50% money markets returns melt away.

If we don’t get coordinated Fed activity Sunday night I am afraid we will see a weak open again on Monday–but absent serious virus news on the weekend we likely are moving toward a base (famous last words).

Well for now I am done until tonight at which point I am going to survey my portfolio damage and get serious about putting together a shopping list.

23 Preferreds and Baby Bonds Higher

Really–I counted an hour ago and there were 23 preferreds and/or baby bonds higher–out of near 700 that I track. Wow! Wow!!

The average $25/share preferred and baby bond is off 42 cents today.

Anyway I have been so tempted to buy in here–but I have resisted–I notice a few folks are nibbling here and there, but myself I want to get to at least noon Monday before making further decisions.

Here is the loser list–looks pretty ugly for shippers and lodging REITs.

I do note that my ‘old friend’ WR Berkley 5.625% (WRB-B) is trading at $24.91 and there is a month of accrued interest in it already. I will resist until Monday.

With stocks off around 2 1/2% right now the close today will be interesting—a nice bounce this afternoon would be comforting, but not sure who would be buying going into a weekend with the virus background at play.

Looking Forward to a Weekend

Yesterdays close in equity markets was really poor as selling continued right into the last minute–that pretty much wrote the story for today’s opening.

Yesterday was the biggest drop in preferreds and baby bonds this week–and likely moved our personal accounts back to break even for the year (with a 30% cash position)–or maybe even a little red overall. The baby is going out with the bath water so we will see if that continues today.

For today we will review accounts–and again, likely do nothing–while we see lots of securities we would like to own it seems likely that we are going to keep powder dry until we get to Monday–and then re-evaluate.

The CEF preferreds have remained fairly strong–being down just 20 cents from their all time high–no doubt folks their are feeling good about their holdings and the safety of the required 200% asset coverage ratio. I would love to have a bunch more of these–but they are not cheap and it is hard to justify purchases right now to capture a 5% current yield. I will be watching these closely–I wouldn’t mind a tumble in them, but I doubt we will see it happen.

So buckle up–let’s see if we can get some stability after what is likely to be a 600 point DJIA drop.