Bankers are getting hammered once again–PacWest, Zion, Western Alliance and First Horizon (because of a failed merger with TD bank). If we are going to see another bank failure it is PacWest – this will play out within a week I think. Personally I have a handful of banking preferreds, in small quantities, but even the small quantity caused some pain yesterday. My desire to balance treasury and CD holdings with higher yield small banks appears to have backfired for the time being–i.e. It was too early. My hope is this plan will work out very well, but certainly now is probably not the time to buy.
After the FOMC rate hike yesterday we need to start watching for weakening economic data – starting this morning with initial unemployment claims and then tomorrow with lower new job creation and higher unemployment. It is time to stop hiking interest rates, but we need to get affirmation from the data and employment is a giant factor in the Fed decision making. Never underestimate the ability of the Fed to screw things up. We’ll see!
Here is today’s economic calendar.
I wrote yesterday that I bought some of the RiverNorth Opportunities Fund 6% preferred (RIV-A) via a good til canceled order at $22.50. The 6.68% current yield provides a great yield for a closed end fund preferred with a A1 rating (assuming the rating is meaningful). It is my intention to put in another good til canceled order today maybe at $22.
Equity futures are a bit soft today while the 10 year treasury yield is lower – now at 3.35%. Let’s get to going and see what the day brings us!!