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Getting Ready for The ‘Big Show’

Well we are 45 minutes away from interest rate announcements from the FOMC at 1 p.m. central. It is always fun to watch the algo’s move markets up and down at 1 p.m.—just noise.

No change is expected and will be delivered–as is usual verbiage in the announcement will be parsed down to the word. The presser after the announcement will of course be very interesting.

Not doing anything today at all relative to markets. Minimal cash–but a huge bunch of CDs maturing on the 15th of February–somewhere around 5-7% of my portfolio.

It is interesting to see the 10 year trading down in the 3.96% area–seems to be in a range of 3.80% to 4.20% now—and interestingly the economic news remains mixed—some hotter than expected and some cooler–dazed and confused again. I don’t really expect that I will change my 7% goal and will continue to move into a higher ratio of preferreds and baby bonds as long as MY expectations are met–my expectations are a rate cut in May and 1 or two more later in the year BUT potentially sticky interest rates on the long end based on the need for Treasury to need to continue to flood the markets with paper.

Todays ‘disaster’ was the earnings report from New York Community Bank (NYCB) which reported a huge loss on 2 loans totaling $500 million. NYCB-A is trading down $3.33 per share at $20.28. The common shares are down $3.83 to trade at $6.55. This has been my fear – smaller banks that surprise markets with large losses. Thanks to Bea for pointing this out earlier today.

10 thoughts on “Getting Ready for The ‘Big Show’”

    1. It’s got to be end of month, don’t you think? especially with PBI down 4%+ on the day… I did see some other unusual price changes that fit the pattern as being end of month inflexible fund generated moves.. For example, NEWTZ 5.5% 2/1/26 closed on a block at a YTM of 8.88% [23.47] while its current coupon issue, 8% NEWTI trades at a premium and NEWTL 5.75% due 8/1/24 is at 24.87, 6.82% ytm

    2. The common increased after hours but then fell. Earnings tomorrow. Seems odd given UPS recent results.

  1. The Fed would probably love to pop the Naz bubble, so will blabber on about higher for longer.

    1. Rocky—I think Powell did a good job of letting some air out of the market today.

      1. I think Powell’s unneccesary, indeed unjustified, comment about the unlikelihood of a March cut will result in a lot more than a one-day decline in the markets.

        1. Stephen–I didn’t watch it live, but heard of such commenting on the news. I think it could temper the markets for a month—but will have to wait and see.

        2. The fed has been wrong for decades and I see no reason why they would break trend now. I sold almost all my banks yesterday expecting Powell to drop a nuke and indeed he did. My thought is they stay high for too long and bring us into recession. Powell said something about it could be another 8mo before he has enough data……wow. But hey, we get another 12mo to lock in yield.

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