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Give Us a Number Just Under Consensus

Well he we are again gearing up for economic news–seems like it is every week. I long for the days when we didn’t have to deal with economic news every darned week. Of course the economic news, which transfers to interest rates, gives us opportunities for investing that we haven’t seen for a very long time.

I’ve always said ‘just give me a decent 7% and I’ll be happy’. So buying the Affiliated Managers Group 5.875% baby bond (MGR) yesterday must have made me happy—well that might be a stretch–although I am satisfied to get 7.16% on that investment grade security. The point here is that there are great investments out there–are you going to take advantage of them–or are you going to look in the rear view mirror and say ‘I wish I would have bought it at $20’ as the share price hits $25 in 24 months?

So the employment report comes out in 15 minutes. 205,000 new jobs are expected with the unemployment rate steady at 3.5%—200,000 new jobs would be nice with unemployment at 3.6%. I don’t want to see the equity market ‘party’—I just want to see some stability for a few days. I actually fear a 250,000 number with 3.5% (or even 3.4%).

So sit back–and of course, just in case, buckle the seat belt.

9 thoughts on “Give Us a Number Just Under Consensus”

  1. Affiliated Managers had a really good quarter as usual, stock big pop. (re MGR their bb bond) MGR on my hot list after Tim’s note..so many to choose from what to buy next??!! Beahttps://seekingalpha.com/pr/19008214-amg-reports-financial-and-operating-results-for-third-quarter-and-nine-months-ended-september

  2. Tim,
    I agree with Windy and Gary These days with big swings like this ending unchanged especially before the weekend might be nice, but I like seeing red especially in a downtrend. Look at 3 month charts and ask yourself what has changed. What I like with a down market, I wait to see if we hit prior lows or can go lower.
    Elections next week are not going to affect the market in a big way but I expect a rally in Nov. with the Feds not spoiling the party. Then Dec is questionable when the Grinch comes back and I fully expect some rate increase. Be a good time to sell those stocks into the rally you thought where going to be winners with the rate increase but turned out to be dogs.

  3. Tim,
    Of course I rather take advantage of the opportunities at $20 rather than at $25 (or $21 or $22..) in the future.

    But the question to me is: I want to buy these opportunities now at $20, or maybe after 1 or 2 more Fed meetings , at which time maybe it will only cost me $19, $18 or less. Of course, in the meantime the $20 opportunity can start vanishing and climbing to $21, $22 or above.

    In short: what will be worse to me:
    a) regret that I bot now and see it drop further,
    b) regret that I did not buy now and if the opportunity vanishes, then buy at $21 or $22 or higher.

    Nibbling of course alleviates the dilemma (or ensures you will regret anyway) .

    1. Agree, I think nibbling helps solve the FOMO point, and still builds a base to add as they goes down– and some income starts trickling in from the small buys.

  4. Unfortunately, I believe that daily economic data will cause real-time gyrations in equity market for quite a while due to Algorithmic trading.

    If you watched the market on Tuesday during Powell’s comments you saw Algo trading at work. The S&P one-minute chart moved smoothly up and down on every phrase Powell said. This was the work of computers, not people, people are not that fast nor coordinated.

    Many of those who employ Algo trading, trade lots and lots of money, however their time frame is seconds and minutes; they are not investors. Some Algos are triggered off key phrases and words, as we witnessed with Powell’s speech.

    “According to Wall Street data, Algorithmic trading accounts for around 60-73% of the overall US equity trading” This is a good read on Algo trading:


    Summary for me…these daily market gyrations reflect Algos trading for short-term profits. Trading on every piece of economic data, they are nearsighted and do not consider the long-term picture. I am fully convinced that Powell is committed to getting inflation under control. There will be a recession, rates are going higher, equities are going down, and preferreds prices are down.

    My goal through this period is to build a strong portfolio of high yielding, investment grade preferreds, with average cost of under $25. This will position me for strong capital gains and steady income post recession when equities move higher, rates go down and preferreds move back up.

    For me tuning out the Algo noise is key, as I can get caught in the “fear and greed” trap. Cheers! Windy

  5. Tim-
    I’ve been buying/nibbling dozens of issues, new for me and some old for me. Ready powder has dropped from 56% to $52%, but zilch today. It’s getting hard to keep up with them on my spreadsheets.
    I think the worst is yet to come- so many headwinds around the world and here.
    I will the know the bottom has arrived… after my powder is gone! ha

  6. SA reports 261K new jobs added, unemployment rate at 3.7%. I don’t know about the rest of the country but here in Central Florida the labor market is tight. Case in point my wife. In March of 2020 she quit her job (for obvious COVID reasons) and last week she decided she misses the socializing aspect of a job and made up her mind to up the “labor participating rate” when she started looking at several web sites and applying for jobs. It took from 5pm Thursday until noon Friday to land a job; all of 19 hrs. Second anecdote: it’s rare the day I watch the local news and don’t see a story about a group of Disney employees demanding pay raises.

    This is one time I hope I’m wrong, but I think the Fed will have plenty of ammo to keep raising rates.

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