As expected the futures markets were only open for a few minutes before they become locked for being limit down (5%).
When we have locked at limit down in the last few weeks it leaves you without a clue as to what will happen after the open tomorrow. My assumption is that it will continue lower.
Those with an IBKR account can trade corporate bonds. Filter will let you scan for maturity, investment grade, etc.
TWS will let you see live ask/bid.
Thanks to 2whiteroses as he helped me on a corporate bond I was interested in and could not buy in US.
So I got an IBKR account and transferred funds. Pretty much just sat there until now. Set more limit orders and we shall see.
Hoping GM and ALLY don’t go BKR in two weeks.
Bond desk thieves continue their game…Offering IG bonds priced like economy is normal and giving out bids to buy as if they are going bankrupt at same time.
Grid–someone always wants to take advantage no matter the situation.,
Tim, Those people are hardly much better than Rida’s outfit in my mind.
Grid – Not to defend the industry or anything but aren’t what the bond desks doing the same thing as all traders are attempting to do right now? Where are you personally going to set your bids for things you want to buy in this environment? Are you going to be Mr. Nice Guy and bid much much higher than what you think you have to avoid being accused of being a thief by buying what someone else is willing to sell? And if you know the underlying strength of what you own and are under no pressure to unload, are you going to set a price far below what you think it’s actually worth? I may be completely wrong but these bond desks are under no obligation to be market makers for the purpose of creating an orderly market. In fact, I don’t even know whether or not that kind of market maker even exists at all anymore even in the world of commons either. Like I said, I could be entirely wrong as to what they’re committed to be doing, but it seems blaming them for doing the same thing those of us who are attempting to trade in this environment are doing seems to be unfair. I’m now going back to my bunker…..
Ha, I knew you would come in to defend it…There would be a decent bid IF I WAS ALLOWED TOO. 🙂 But between the desk and brokerage they wont give me a chance to offer something at least more fair than what is being trotted out there as take it or leave it…Total ripoff….
sounds like you need a better broker 🙂
MCG, I dont need a 4th brokerage account, ugh. I would rather just complain, ha. Part of the rant was to tease 2WR a little. I knew he would come to their defense. 🙂
Grid, what I am seeing is that many corporate bonds have NO bidders at any price. The institutional bond desks have walked away, leaving small buyers to set the bid price. I have taken advantage of this pricing, under the assumption that the companies do not BK. Companies like Ford and GE are excellent studies since they have bonds maturing everywhere from 1 week to 30 years out. Pick the time you think they will go BK and buy before that. Not IG, but interesting risk/reward tradeoff.
Tex, I cant set a bid if Im not allowed too… The bond market…The last frontier for the small timer to get ripped off.
Best guess is that companies with high dividend yields will cut to pay down debt. Would you prefer T at 7% yield or T with 4% yield but paying down debt faster?
Bought more Municipal Bonds this morning. 3.8% Tax Free due in 2032, callable in 2027. Just don’t see the FRB letting state Governments fail.
This is just 12% of my portfolio but probably the part I feel most comfortable about at the moment.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) (“CorEnergy” or the “Company”) today announced that its Board of Directors has authorized a repurchase program for the Company to buy up to the remaining amount outstanding of its 7.00% Convertible Senior Notes due 2020, and up to $5 million of its common stock and 7.375% Series A Cumulative Redeemable Preferred Stock. The Company plans to repurchase notes or shares from time to time through open market transactions, including through block purchases, in privately negotiated transactions or otherwise. The timing, manner, price and amount of any repurchases are to be determined by senior management, depending on market prices and other conditions.
“With a strong balance sheet and more than $250 million in available liquidity, we believe 2020 will present attractive portfolio growth opportunities for our company,” said Dave Schulte, Chairman and Chief Executive Officer. “However, our board also recognizes that repurchasing shares or notes in this unusual time is an attractive investment opportunity.”..
https://www.marketscreener.com/CORENERGY-INFRASTRUCTURE-27137024/news/CorEnergy-Infrastructure-Trust-Announces-Repurchase-Program-30212682/
The lack of liquidity is expanding its reach. Not reported in the MSM is that MBS forward commitments have effectively seized as Fed infusions have fallen short. The implications for the housing market are significant if not corrected soon.
It seems every few years we see some kind of “once in a generation event”. Starting with the crash of ’87 I think I have seen about 8 of these once in a generation events during the past 30 years. I no longer seek the big capital gains as I did when I was younger. Every position in my portfolio is geared toward income. I am fortunate that I can reinvest about 70% of the portfolio income each month. However, I fully expect that some of the preferreds and possibly baby bonds may announce deferred payments of dividends and interest during the coming days. I also understand hope is not a strategy but I am confident in the ability of this great country of ours to rebound and rebuild quickly from this fiasco.
Some of us depend on our dividends to put food on the table so there’s no going to cash to wait it out. My project this last few weeks has been to lock in current (or close to current ) yields going into the future. For example, my project for tomorrow is to sell COFprF callable later this year and replace it with COFpr I or J which are callable in 2024 or 2025. I’m not too concerned with the day’s trend up or down as I’m buying in the same market into which I’m selling. My theory is we had declining interest rates coming into this and the economy was pretty decent so no way we’re going to see higher rates probably in my lifetime (I’m 78). I’m much less concerned with total value of my holdings (that’s an issue for my heirs) than I am with current and future cash flow. Thoughts?
Vinny, You are exactly correct. That is (was) the promise of working in America with discipline, decades of nose down personal conservatism. The govt buying down it’s own “safe-rate” to zero is a slasher movie approach to millions of us. I can only think of one word which is applicable here (omitted).
I hold the best outcome for you and yours. Sometimes sticking with a long term plan, instead of some glorious readjustment can be seen as prudent in retrospect years from now. JA
Jerseyvinny,
One thing to consider: eventhough you might not care about a possible drop in the value of the stocks you hold, you’d still need to take into consideration the possibility that the dividends could be suspended AND the value of the stocks continue to drop. Preferred or not, this could happen. These are not normal circumstances and, unlike 2008, the problem is not limited to one sector. It’s global economic devastation the likes of which have never been seen simultaneously throughout the world.
When money market funds and US treasury funds show signs of distress and lack of liquidity as is evident now, the primary objective is capital conservation rather than looking at return on capital.
as for interest rates, who knows but with the proposed packages of trillions in spending it would not be surprising to see long term interest rates go up even as short term rates stay near zero.
Stay safe.
Yeah, when the futures go limit down, I follow the SPY pre-market trading after 4am…in the dark as to just how bad it’s going to be until then, however:
https://www.nasdaq.com/market-activity/funds-and-etfs/spy/pre-market
Hmmm. Bought 4 new positions I’d been lusting after and added to a couple of existing ones. Sold one (F) which has been a bow-wow for a while, suspension of the div. being the last straw.
All indications seem to point to further declines in general markets.
Think I’m going to put rest of cash into “high yielding” money markets and just watch and wait.
Ron, was going to but some T this morning, but will follow you and wait for a while. Stocks are going lower and who knows for how long. What looks like a bargain today may become more so tomorrow. At this point, I’d rather be a spectator.
Incredible.