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Calm After the Party

Equities had quite the party yesterday with the S&P500 up almost 1%—which serves to keep some fire on the ‘bottom is in’ argument. I wish it was in, but I have no real idea–seems to me we need to see a lot more economic data before we know where we are going. Of course the ‘smart people’ are vying for bragging rights of who had the correct guess. This morning futures are just slightly positive.

The 10 year treasury yield crept 4 basis points higher to 4.20% which is exactly where it is at this morning. Daily movements up or down in rates of 3,4 or 5 basis points are not meaningful to markets–of course the big potential move is slated for Thursday with the release of the CPI.

Yesterday we didn’t have any real economic news items–same for today. Of course today we have elections, which could be seen by some as a economic news item. Just a tiny reminder that we don’t allow political discussion here–while I know it is important it is simply too divisive and interrupts civil discussion. Yesterday a few comments ‘touched’ on politics and I left them up, but hopefully we can get through today without incident.

I didn’t even open my accounts yesterday, but my google spreadsheet indicated I had a nice gain of around 1/2%. Today I doubt I will do anything at all–I am not looking to add new positions and my nibbles have simply added to current positions. I have maybe 60ish positions so most bases are covered—high yield bucket, safe bucket, term preferred bucket etc. and pure cash positions are low (5-10%). I will have more cash available continuously as I hold a gaggle of T bills with 3 month, 6 month, 9 month, 1 year and 2 year maturities–as well as utility bonds and Farm Credit bonds.

If you haven’t been glancing at the ‘Headlines of Interest‘ that I post each night (between 5 and 7) you should take a look. While certainly I can’t capture 100% of all pertinent headlines I do post many press releases that may stimulate ideas. After I post them I always go back and read 3-4 that caught my eye.

10 thoughts on “Calm After the Party”

  1. Tim. All ,the bargains,,,are here!! have not stopped . Buying…5-7.5 % returns ++$2-5 below Par. Georges

  2. Nearly everything is green today- RIV-A down ~2.68%, but rising- so grabbed a few. And good ol’ ARCC taking a dip, now heading up a little–just watching.
    Time to hand sit, I guess.

  3. Tim, equity markets have settled in a range for the past month and volatility has gone down. IMO it will take a surprise number on the CPI for markets to make a major move one way or the other. Markets might get back to be boring for a little while. Cheers

    1. Windy

      I see the upcoming sanctions on Russian Oil and subsequent OPEC+ meeting to be a significant catalyst. The festivities will happen in the first week of December.

    2. windyducat—boring is good. Yes it will take a surprise to move things too much, but folks are able to contrive ‘stories’ on any number and then before you know it investors are ‘drinking the koolaid’.

    1. Gary–you could message me on seeking alpha–I never look at those messages but I could.

      1. Tim
        can you suggest a child’s guide or something to read on farm credit bonds.
        The area is of interest but I need to upgrade my understanding. Anything you can suggest would be appreciated. tia sc

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