5/6/2024
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Below are some press releases from company’s that have preferred stock and baby bonds outstanding.
Stifel Reports October 2022 Operating Data
Brookfield Infrastructure Renews Its Normal Course Issuer Bids
RiverNorth Specialty Finance Corporation Announces Name Change to RiverNorth Capital and Income Fund
Looks like markets are waiting on economic news later in the week. Chinese unrest is playing on the markets today. Markets have moved lower in an orderly fashion.
Treasury yields today are moving at a snails pace. There is no economic news today, but in a few minutes we have a couple of Fed folks shooting their mouths off. Big mouth Bullard will give an interview at 11 a.m. todays and Williams will speak at the same time. Can’t imagine what Bullard can say that is more hawkish than his recent statements—but he can always come up with something–who knows.
Tomorrow we have a few more minor reports–Case Shiller home prices and consumer confidence. Not likely market moving.
On Wednesday we have ADP employment (who really cares?) and the revision of 3rd quarter GDP. We will also have the job openings report–we’ll see if these are weakening. Also Fed Chair Powell and Fed governor Cook speak around midday.
Thursday and Friday will have market moving economic news–posted below. These will be wild days.
Well here we go once again going into what is 100% certain to be an exciting week with plenty of economic news to drive markets up and down.
Last week the S&P500 traded in a range of 3933 to 4034 -relatively speaking a quiet week – a range of just 2.5%. The index closed at 4026 – near the high. Of course the week was just 3.5 trading days and portions of those days were light on volume. This week is destined to be much more volatile with many economic releases of importance.
The 10 year treasury traded in a range of 3.68 to 3.83%, closing 3.69% – perfect! A nice narrow range which keeps income issue moving a little higher. Whether rates move up or down as long as they don’t move too quickly preferreds and baby bonds won’t react much.
The Federal Reserve balance sheet data was not released on Thursday as is the norm – with the holiday on last Thursday. We should see the number later today. Of course we remain on a $95 billion monthly reduction schedule–we are creating a little room for the next quantitative easing cycle (when it comes–and it will come but we don’t know when).
Last week we had green prices on $25/share preferreds and baby bonds. The average share moved higher by 16 cents. Investment grade issues moved 19 cents higher while banking issues moved 20 cents higher. CEF preferreds only crept up by 4 cents with mREIT preferreds up 17 cents. We are now about 5% higher overall than 4-6 weeks ago.
Last week we had no new income issues priced.
I trust everyone had too much food and too much football yesterday. Hopefully everyone had time to reflect on what they had to be thankful for—I know my wife and I talked about it as we have done in recent years. We can find plenty to complain about, but in reality we have way more to be thankful for–in particular family, health and to a smaller degree wealth. Our wealth isn’t such that we can toss money away on non important items continuously, but adequate to provide the basics in life that are important to us.
I am also thankful for the readers and commentor’s on this website. Certainly this website provides pleasure to me or I wouldn’t work on it so much—honestly if I didn’t have this to work on I would be a bit lost after 16 years. This past Wednesday I received a Thanksgiving card and ‘donation’ from a long time reader–with it a bit of his personal ‘story’. Items like this make working on the website worthwhile (not the donation, but the story).
Ok so today futures are up a bit and historically today should be in the green by around 1/2% or so. Interest rates are up 1 basis point at 3.71%.
As has been typical in recent weeks and months I will do little or nothing today market wise. I could nibble a small amount adding to current positions, but it will be very small. November has been a good month for me with reasonable gains as we approach the end of the month–I always love the end of the month with dividends and interest payments pouring into our accounts on the last day of the month or 1st of December – helping to fund some nibbling next month.
Next week on Monday we have no real economic data being released–Thursday and Friday will bring the real news with the PCE price index on Thursday and then November employment numbers on Friday. These will be contributing data points for the December FOMC meeting decision of either a 50 or 75 basis point rate hike so they will be closely watched.
Below are some press releases from company’s that have preferred stock and baby bonds outstanding.
SJI Announces Regular Quarterly Dividend
AM Best Assigns Indicative Issue Credit Ratings to MetLife, Inc.’s New Shelf Registration
FTAI Aviation Ltd. Increases Revolver to $300 million from $225 million
NIAGARA MOHAWK POWER CORPORATION DECLARES PREFERRED STOCK DIVIDENDS
The Fed FOMC meeting minutes just released pretty much confirmed my thoughts and where we might be going. Most FOMC members are thinking a reduction in interest rate hikes starting in December–but it isn’t unanimous–some are thinking that the continuation of 3/4% point hikes are still the right way to go.
We have employment numbers coming in 9 days which is then followed up by the consumer price index on December 13th–the same day as the next FOMC meeting starts. Can you imagine the shock that will hit the market if those 2 reports come in hot? It could happen.
With the level of uncertainty in markets, interest rates and global politics (including war) we could get all kind of shocks in the markets–but pretty much regardless I am planning to remain close to fully invested in a diversified portfolio. I have found this year that in spite of the hammering preferred stocks and baby bonds have taken my portfolios are only down a manageable amount–a continual drip of dividends and interest have helped the bottom line.
Today I took a part position in the WR Berkley WRB-E 5.70% baby bond–solid issue with a 6% current yield (but potentially redeemable in only 4-5 months). I hope it will continue after 3/30/2023 (1st call date), but not overly concerned one way or another. I may add a part position in WRB-F 5.10% issue with a slightly inferior current yield, but a 12% yield to first call–will see.
Finally we see a jump in jobless claims with numbers up 17,000 for last week–to 240,000 and continuing claims up to 1.55 million from 1.5 million. Honestly not a giant jump on a historical basis, but directionally softer. On the other hand the durable goods orders and capital equipment orders were stronger than expected—overall mixed signals.
Equities are dead flat–yesterday at this time markets were flat and I though we would see a quiet day–boy was that incorrect with equities up over 1%. Guess we will have to wait and see–won’t change my plans.
Interest rates are at 3.77% on the 10 year treasury—Flat!
We have some other economic numbers today, but the FOMC minutes at 1 pm (central) could be market moving–volume will be light this afternoon and minor volume could mean big moves.
Last night we saw a tender offer from PS Business Parks for their outstanding preferreds—criminals and thieves is how some describe the tender. Shares will be delisted soon.
Today my goal is to purchase a baby bond issue from WR Berkley–no sure which issue yet, but I need to ‘eat my own cooking’ since I wrote the Seeking Alpha article last week.
Below are some press releases from company’s that have preferred stock or baby bonds outstanding.
CTO Realty Growth Declares Dividends For the Fourth Quarter 2022
iMedia Brands Reports Third Quarter 2022 Results
AM Best Assigns Issue Credit Ratings to Lincoln National Corporation’s New Preferred Stock
TEN Ltd Reports Strong Results for the Third Quarter and Nine Months Ended September 30, 2022
PS Business Parks has just announced a tender offer for their outstanding preferred shares.
Of course they want them on the cheap—I have a name for them but can’t type it here.
Yesterday was fairly quiet all around – stocks and bonds – tight trading ranges and I love it. Preferred stock and baby bond pricing can/will move up penny by penny in a flat interest rate environment. The nervous nellies who bought high and sold low eventually make their way back into the market–slowly. Of course it is way too early to declare victory over inflation–so who knows if this is a flattish interest rate environment–2-3 days is not a ‘trend’.
I took the opportunity, on a quiet day, to add to my very small position in the new Lincoln National Corp (LNC) 9% non-cumulative preferred at $26.50. My commitment remains small to this one, but am likely to add again soon.
I’m looking to do more nibbling–nibbling which over the course of months turns small positions into full positions–but like the Fed I am ‘data dependent’ and want to see inflation data for November before making any large commitments to buying.. I do have some 3 month t-bills maturing in December so will need to make the decision as to what do do with that cash.
Today we have no economic news of real interest so the quiet day may persist all day long—but tomorrow we could see some movement—even being Thanksgiving Eve. Below is the economic calendar for Wednesday–lots of data–none which is probably (who knows) highly market moving, but the FOMC meeting minutes in the afternoon could provide additional ‘color’ relative to the Fed rate hike in December (i.e. 50 versus 75 basis points).
Source:Marketwatch