I continue to be mostly in the ‘hold’ camp. On Monday I nibbled a few bonds–maybe boredom, but they are good bonds–in fact if I thought we had seen peak interest rates I would have bought a truck load instead of a nibble.
With 13-14% cash I am in a comfortable position–but with cash paying me 4.5% to 5% (maybe more if I look harder)–I am totally not motivated to buy–and being 100% certain interest rates are moving higher for months to come I see better prices are ahead. My cash will grow by at least 1% in March as I have a fair sized stack of treasuries maturing on the 15th.
Again this morning we have equity prices up a little (1/4%)–of course futures prices are not highly meaningful and we will know in 9 hours how stocks trade–the 10 year treasury is trading at 3.94% and is looking for a reason to breach the 4% level. We have the manufacturing purchasing manager index at 8:45 a.m. central and ISM manufacturing and construction spending at 9 a.m. central.
We have only 1 Fed yakker on the schedule today so we should not have any ‘bombs’ thrown in this respect.
I see General Motors is laying off 500 white collar workers–not really meaningful in terms of employment news–any major company has a lot more dead wood around than 500–they probably could reduce 1000’s and not miss them. This looks like a PR stunt of sorts–they are saying ‘see we are keeping things lean and mean’–keep the activist at bay and feed the investor need to see that someone is taking care of business.
Well time to check the accounts to see what I see in terms of dividend and interest payments hitting the accounts (end of month/start of month).
Tim.. Safe.. in the Bank for 4- 5 % But, the bank is buying the same preferred stock at 7-8 % and keeping 2-3 % for themselves…still buying A- rated preferred stock $2-3 below par and 7-8 % returns.. Georges.
If anyone want’s to take a walk on the wild side, I bought a bit of this ALLY Bank BBB- bond issue on Schwab. CUSIP: 02006DM32
Maturity Date 03/15/2026
Coupon Rate 6.150%
Coupon Type Fixed
Coupon Frequency Monthly
Accrual Day Count 30/360
Dated Date 03/02/2023
First Settlement Date 03/02/2023
First Coupon Date 04/15/2023
It is callable beginning 9/15/2023 then every 6 months thereafter, but hey, treat it like a 6 month CD that probably will be rolled over 🙂 Yes indeed, for a near retiree, a 6% bond makes one reluctant to buy equity or BB preferred issues.
FIDO – AA/AAA rated FHLB GSE Bonds listed from 5.35-6% today.
Maturities from 9/20/24 to 3/31/30. Beginning to feel conditioned into perpetual waiting as rates continue their march
Note these FHLB issues have different call provisions and they don’t necessarily coincide with the longest maturity… First blush it looks as though the 5.60% of 3/8/28 has the best call protection, not being callable until 3/8/24 and then not continuously but every 3 months thereafter. It also has the shortest settlement date of 3/8 along with the 5.45% due 5/8/25