Yesterday we had new home sales numbers released that blew the forecasts out of the water–763,000 versus 675,000 forecast–wow!! Strong employment is driving housing and new house sales are up because folks in a house with a 3% mortgage don’t list their houses for sale–buy new or go home. At the same time as sales shot higher Case-Shiller showed prices down 1.7%–that is a 20 city average–I question this because anecdotally prices are moving higher (albeit at a slow rate) in much of the midwest.
Durable goods orders moved higher by 1.7% versus a forecast of -.9%. Data is building for a Fed funds rate hike in July–it is way to early to say for sure, but the Fed is looking for ‘cover’ to be able to justify their ‘data dependent’ rate hike.
Today we have just minor economic new on the calendar – but Powell is speaking (and we know what his line is).
Many of you already know that Brookfield Reinsurance has made an offer to buy American Equity Life (AEL) which has 2 preferred issues outstanding. Preferreds of company’s that are bought by any of the Brookfield divisions tend to fall sharply–but the AEL shares did not fall yesterday. It is a misplaced belief that Brookfield suspends preferred dividends – they make each company carry their own weight and the parent company does not ‘bail out’ various divisions that can’t earn their dividend. Let’s hope sane heads prevail with the preferred shares.
Tim
Does Brookfield have a track record of either loading up its acquisitions with debt or forming partnership arrangements ( the payments for which magically “trump” preferred dividends?
Thanks
Brookfield spun off and defaulted on ALIN preferreds in that acquisition. Different situation as they were already distressed but were still paying. Shows that preferred investors are a less than preferred priority.
Well the $Trillions$ of Fed/Fiscal stimulus is just ‘sloshing’ around looking for a place to land. Guess it fell on housing and durable goods this month. Look to the Fed to up another 1/4 point in July.
Our national debt has exploded since 2008, approx 10 $trillion$ now 32 $trillion$. The treasury has to refinance 1% debt to 4-5%. Annual deficits of close to 2$trillion$ and higher coming our way fast!