Markets seem confused–rate cuts, no rate cuts. Not sure why there is confusion–either there is data dependency or there is not. Data keeps coming showing the economy keeps chugging along –weakening maybe, but a fair distance from slowing sharply. Yesterday we had 1st time unemployment claims come in at 187,000 versus forecast of 208,000 while continuing claims fell as well. Housing starts and building permits came in above expectations. Retail sales, which were released on Wednesday, came in hotter than predicted–let’s face it rate cuts are not warranted now or likely in March. We do have bunches of data to come in before the March FOMC meeting–things could change.
The 10 year treasury yield continues is now trading around 4.13%–about 1 month ago the yield was 3.78%. With this sharp rise we should have seen a setback in income issues–but it was very minor which surprised me–over time preferreds and baby bonds inversely follow the 10 year treasury closely, but for now they have disconnected a bit-fine with me.
Equity futures are up this morning—who knows where they will be by days end. We are in earnings season and I have paid attention to bank earnings and am seeing about what I expected with earning lower year over year as net interest margins have been reduced and special assessments from the FDIC have been biting. I did notice that 1 bank reported record earnings–Bank OZK. Thus far bad loans have been manageable – hurting yes – disaster no.
The last couple of days I have barely even looked at my accounts–yesterday I did glance at them after the market close and was prepared for lots of red–surprise – accounts were off, but not in a large manner–very minor.
Today I will do no buying–selling? I have been pondering locking down more profits in bankers and select insurance companys, but I don’t want to sell just out of boredom (to do something)–what is the point? I am building my list for next month (and March) when I have bunches of CD maturities. The list will center around issues I already own–my list of holdings is here. Of course short term CDs are still attractive in the 5-5.25% so this is an option–we’ll see.