If I can’t have good faith in interest rates at least holding current levels and not moving higher–and I don’t have that faith right now, I will use some short dated maturities to move my yield a little higher.
Yesterday I bought shares in the Gladstone Land 5% term preferred (LANDM) at a price of $24.65. This issue has a mandatory call for 1/31/2026–so about 9 months away. This is a yield to maturity of just shy of 7%–which hardly moves my portfolio needle–but a few extra nickels and dimes here and there amounts to real money eventually.
After a strong bond rally yesterday afternoon the 10 year treasury is trading at 4.38% this morning–no one knows where it goes next–certainly I don’t know–thus the purchase of a term preferred.
I will be watching for more potential buys of similar types of securities–not very exciting but it for now the best risk/reward for me.
Below are press releases from companies with preferred stock and baby bonds outstanding. Additionally, news of a more macro economic importance may be posted. Earnings season has essentially ended so news will be slower until we get into mid April when some earnings will start to appear–I see we are starting to have some earnings coming in now.
I had heard we had some significant pauses on various tariffs late Friday–then over the weekend we had folks correcting this to be a partial pause in tariffs. Then if you follow DJTs tweets you became more confused.
From an investor point of view I am getting tired of all the balony. I have no confidence to make any purchases of preferreds or baby bonds unless they are really short maturities. Why should I put my capital at risk just to be jerked up and down day in and day out.
After starting the day out with the S&P500 up almost 2% we are now down to just 40 basis points higher on the day.
The 10 year treasury started off around 4.45% which was down 4 basis points from Fridays close–now we are at 4.41%. Can’t argue with lower rates since it has helped portfolios go green–but where they end the day, the week and the month is totally unknown.
I guess I will watch the ‘hiding spot list’ and try to buy some short maturity issues just to try to bump my yield by 1-2%, but the amount of dry powder I am willing to commit at this moment is pretty meager.
The wild ride continues in the equity markets–and will likely continue all through the current week with the tariff uncertainty being front and center. The S&P500 moved higher last week by 5.6%–it didn’t feel like a big up week to me probably because I focus on interest rates which are remaining stuck at fairly high levels.
The 10 year Treasury closed the week at 4.49% which was a massive 50 basis points above the 3.98% close from the previous week. We had a number of treasury auctions last week and they all came off fairly good–just maybe at these higher rates there are buyers for our debt. We’ll see what kind of news comes out of the administration on the tariff front and whether we can get interest rates under control. At this moment (Monday 6 am) the 10 year Treasury is trading at 4.44%.
Last week had both consumer prices (CPI) and producer prices (PPI) announced and both came in fairly soft, but neither announcement moved interest rates lower and the numbers were perceived as ‘old news’–before tariffs start hitting.
This week we have none of the most important economic news being released, although we have retail sales being announced on Wednesday–but it is old news being from March. Maybe we will see strong sales as folks moved to make purchases ahead of tariffs.
Another item to note is that mortgage interest rates took a large jump last week which without doubt when coupled with consumer sentiment falling will hurt the housing market if these high rates remain in place for long. Housing is one of the most important numbers I watch after inflation and employment as an indicate of future economic health.
The Fed reserve balance sheet rose by $4 billion last week–a bounce that occurs about once a month as the Fed continues to runoff their assets–now at the reduced runoff rate of $40 billion a month– of which $5 billion is treasuries with $35 billion being Mortgage securities.
The average $25/share preferred stock and baby bond price took a shellacking last week with the average share falling by 49 cents. Investment grade issues fell 62 cents, banking issues fell 58 cents, CEF preferreds fell 18 cents, mREIT preferreds fell 48 cents and shippers actually rose by 4 cents.
I’ve just been looking at the numbers–the economic releases for this morning.
Consumer sentiment continues to crater–I expected this as I am sure most folks also expected it. Inflation expectations jumped up to 4.4% for the 5 year period, although near term expectations shot up to 6.7%. On the other hand looking in the rear view mirror producer prices for March came in pretty soft–much better than expected.
The equity markets are dead flat, but the 10 year treasury shot higher by 16 basis points to now trade at 4.55%.
Our accounts are the tiniest amounts red–I would have guessed they would be more red–but not yet. One can not predict the next 15 minutes let alone further out.
So what am I doing?? Nothing–just thinking. Am I positioned right? Are these rates going to keep moving higher? Are there some perpetuals I need to hold my nose and buy? So many questions and so few good answers.
Most likely I will do nothing at all. Definitely not selling, but more buying I doubt–at least not today.
