Monday Morning Kickoff

Records continue to be set in the equity markets–even with a holiday right in the middle of the week. The S&P500 opened the week at 3226 before seeing a low of 3220, but turning higher on Friday and closing at 3240.

The 10 year treasury seems to have found a fairly “sticky” yield in the last few weeks–in the 1.85% to 1.95% area. Last week it opening at 1.91% before hitting 1.94%, but closed the week at 1.87% as it drifted lower last Friday. With the slow markets last week whether this is meaninfull at all is doubtful. I see that the yield has popped a bit this morning to be at 1.94% now.

The Fed Balance sheet popped again last week as it grew by $28 billion. This gives us total growth during December of an incredible $100 billion of Non quantitative easing (that’s what Powell says anyway).

Last week we didn’t have any new preferreds or baby bonds announced–probably will be the same this week with the holiday right in the middle of the week again.

Below you can see that pricing on shares of preferreds and baby bonds moved the tiniest amount higher for the week. Remember that ex-dividend dates occur during these period and distort the numbers a little, but with a larger sample size the distortions are minimized.

Monday Morning Kickoff

The S&P500 traded in a range of 3183 to 3226 and closed near the high at 3221 last week as stock traders and investors continue to drive prices higher.

The 10 year treasury opened at 1.85% before moving as high as 1.95% before closing out the week at 1.92%. The question is can the rate move above 2%? As long as we see a very slow move higher I don’t mind seeing rates rise a bit–it will eventually put a stop to these sub 5% issues.

The FED balance sheet grew by a giant $42 billion. With the new QE the balance sheet has now grown $378 billion since 9/4/2019–this is really a giant QE–$90 billion a month.

Last week we had just 1 new income issue.

Gabelli Multimedia Trust sold a new 5.125% perpetual preferred which is now trading under OTC ticker GABGP. Shares last traded at $25.35

This image has an empty alt attribute; its file name is ggt.png

In addition to the Gabelli issue the new 8% foxed-to-floating rate issue from Medallion Bank (a division of Medallion Financial-MFIN) began to trade.

This image has an empty alt attribute; its file name is mbin.png

After starting out very weakly early in the week–trading as low as $24.40 the issue got some traction as the week wore on and the share price traded as high as $25/share, before settling back a bit in the $24.90 area.

Disclosure–I bought a 1/2 position at $24.49 and finished the 2nd half at $24.65. I likely will exit this position soon as it was meant only as a ‘flip’.

Monday Morning Kickoff

Opening the week at 3142 the S&P500 moved lower to 3126 on Tuesday before moving higher to close the week at around 3169–short of a 52 week high in the 3183 area.

The 10 year treasury opened the week around 1.83% and drifted plus and minus a few basis points before taking a run all the way to 1.92% on Wednesday based on never ending Chinese trade rumors. Rates then drifted lower as the trade ‘deal’ turned in to not much at all–closing the week at 1.82%. We shall see the veracity of Chinese ‘deal ‘ claims this coming week – I would not be surprised to see rates drift through the week.

The FED balance sheet grew again last week–this time by $30 billion for a 3 week total of $65 billion–this non-QE, quantative easing is really quite the joke as FED explanations make little sense and as some on the site have posited–Who is in trouble? Is it the German derivative king Deutsch Bank (DB)? Or is the FED simply monetizing the massive debt of the U.S. Government? Sooner or later we will find out what the hell is up–but for now ‘party on’ -ignorance is bliss.

Last week we had a number of new issues priced.

Insurer WR Berkley (WRB) priced a new baby bond. The issue is not trading as of yet.

Closed End Fund Gabelli Equity Fund (GAB) priced a new 5.00% perpetual preferred which is now trading under OTC ticker GBLQP and last traded at $25.26

This image has an empty alt attribute; its file name is gab-1.png

Self storage giant Public Storage (PSA) priced a new perpetual preferred issue with a coupon of 4.75% which is trading under temporary OTC ticker of PBSGZ. The issue last traded at $25.10.

Monday Morning Kickoff

The S&P500 moved in a range of 3070 to 3150 before closing the week at 3146–a gain of almost 2%.

The 10 year treasury moved in a range of 1.73% to 1.86% and closed the week at 1.84%.

The Fed Balance Sheet moved higher with $13 billion added to holdings. The previous week was $22 billion higher (just released also because of the holiday). This is a 2 weeks addition of $35 billion to the balance sheet.

There were a number of new issues announced last week.

SVB Financial (SIVB) announced a new preferred stock offering. It is now trading on the OTC Grey Market and last priced at $25.16.

This image has an empty alt attribute; its file name is svb.png

Customers Bancorp (CUBI) announced a new fixed rate debt issue with a coupon of 5.375%. This issue is not yet trading and the ticker is not know as of yet.

This image has an empty alt attribute; its file name is cubi-1.png

Ford Motor Company (F) announced a new baby bond with a fixed rate coupon of 6.00%. The issue is not yet trading, but some folks have been able to buy through their brokers on the bond desk.

AT&T (T) announced and priced a new perpetual preferred stock with a fixed rate coupon of 5.00%. The issue is now trading on the OTC Grey market and last priced at $24.92.

Lastly, very late Friday non traded REIT Healthcare Trust Inc. announced pricing of a new perpetual preferred at a tasty 7.375%. The issue has not traded (that we could see), but should do so today (Monday) under OTC ticker HLTCP.

Monday Morning Kickoff-Corrected

I HAVE REMOVED THE CHART ON PREFERREDS AND BABY BONDS AS I FOUND AN ERROR IN CALCULATIONS.

Last week, being a holiday week, was fairly quiet, although–of course, the S&P500 moved higher. The average moved in a range of 3117 to 3154 before closing the week at 3140–a gain of just under 1% for the week. All news is good news (so says stock prices).

The 10 year treasury traded in a range of 1.73% to 1.80% with a close at 1.78%–essentially unchanged from the week before.

The FED balance sheet data was NOT released at noon Friday as is normal, because of the holiday business week. We should see it by noon on Monday.

As might be expected the number of new preferreds or baby bonds announced last week was muted.

Fortress Transportation and Infrastructure (FTAI) priced a previously announced fixed to floating rate preferred stock issue that carries a coupon of 8.00%. The issue is trading under the temporary OTC ticker of FTABP and last traded at $25.21. Details are here.

Banker First Republic (FRC) priced a new fixed rate at the rock bottom coupon of 4.70%. The issue is trading on the OTC Grey market under the temporary ticker of FRCJL. It last traded at $24.90.