Recent trading in equities (of all sorts) has been about as rock solid as we have seen in recent years. The movements in equity prices have been in spite of movements higher in interest rates. The 10 year treasury is trading at 4.13%—up from 3.79% about a month ago and during that same time frame the average $25/share preferred and/or baby bond is up 1/2%. Historically the 10 year treasury is very correlated with preferreds and baby bonds—so I guess we can expect movements to bring this correlation back into historical norms–or can we?
Yesterday we had the leading economic indicators released and as has become ‘norm’ in the last number of months the number came in better than anticipated at -.1% the expectations was for -.3%.
Today we have no important economic news–but tomorrow we have PMI (purchasing managers index). Then on Thursday we have the 1st look at GDP for the 4th quarter–very important–forecast are for growth of 2% which would be quite a slow down from the previous quarter–let’s see if the economy has slowed that much or if once again an economic number comes in ‘hotter’. We then wrap the week up with the PCE (personal consumption expenditure)–once again very important–at this time next week we could have a 10 year treasury at 4.3%–or at 3.7%–we’ll have to wait and see.
Yesterday I made a sale–I sold my entire position in Enterprise Financial 5% Perpetual Preferred (EFSCP) at $17.68. With a couple dividends my return was around 15%. Interestingly EFSC released very earnings after the market close yesterday and they were solid–no major bad loans announced etc. As is normal they did pay a relatively large FDIC special assessment as all banks have to replenish the FDIC insurance fund. I will try to write today on my thoughts on this sale (why did I sell it?).
Markets are looking kind of quiet this morning with the S&P500 up a tiny amount. Earnings are driving these indexes this week–this morning 3M and P&G reported. No reason to think we will see anything of significance in markets today–Goldilocks reigns!!
Tim, I would be very interested in your reasoning of selling your EFSCP You did catch the high of the day on a volume of about 1,700 shares so not your normal market mover for this site. I suspect that like most of us you wonder about the future of bank earnings. Like 2WR mentioned ZION also posted decent earnings. This sale is opposite of what I normally expect. Usually someone buys 30 to 45 days out to take advantage of the run up in share price before ex-dividend date. Disclosure, I have been watching EFSCP and I do have a low ball bid in so it wasn’t me who bought your shares. I was dumb enough to buy AGM PRC yesterday with a 6% yield
My suite of portfolios is up a combined 1.47% so far this year so I am not complaining. I have preferreds, BBs, and treasuries, mainly, but some CDs. I do have a small trading account with “play” money to surf the action in growth stocks (usually option writes and strangles) but I do not include that in my calcs (it’s up about 5%). Current play there is a weekly NVDA 560/670 strangle that I legged into yesterday at $180 per ($110 on the put side and $70 on the call).
My personal outlook for rates is not as dovish as the mainstream but I don’t see raising in the near future either. Maybe a late year cut or two. if we see recessionary data. I actually would not mind seeing the 10 year settle in the 4.0% yield range for the next couple of years – I am enjoying being able to park cash somewhere for 4.5-5.5% with very little risk.
Yazz, Sunday driving down the freeway I spotted 2 large billboards next to the freeway advertising for job openings. Glassdoor, Linked In , Indeed are not working. The jobs are what I would call middle management and skilled trades. One was the outdoor billboard company itself looking for a sales manager. The other was a construction company looking for an estimator, project manager and one other position. With my skill set, if I was 10yrs younger I would be interested.
The stories we read on the internet of people putting out 1,200 resumes and not getting offers in a year is because we had too many people go into tech. Now those fields are crowded and no one wants the jobs that are open.
CM – I have seen those too and I get inquiries on my linked-in account all the time for VP of Engineering where there have been like 1500 applicants! I am 64 and just retired from NASA on 1/12/24 – Spent 24 years there – first three as a engineering contractor (EE) and 21 as a civil servant (I had 20 years before then in the telecom industry but got caught at a start-up back in 2000 just as the internet bubble burst!)
I could probably go back to work as a contractor/consultant here as they are always looking for outside engineering help but, I feel spent after 43+ years working my butt off in the high-tech world! It’s always a possibility in the future but, I don’t need the money and I have plenty of hobbies. I am Chair of the Board for the Library System at the local university (Salisbury University) and spend some time with that – esp. local history pursuits. I run (a lot, including 50K trail runs) and I have grand-twin boys that live about 3 hours away – plus I have my little “trading” hobby to play around with an hour or so a day. I think I’m good!
Ha, nice to see the Salisbury connection, I graduated from the college many moons ago.
Yazzer – my hat’s off to you doing 50k trail runs at age 64! I’m 67 and only brisk walk 2-3 miles daily. A word of caution on overdoing running; most everyone I know who has run alot have new knees and the new ones are rarely as good as the original.
Hey yazzer – I’m 58 and still do some 50k’s too. Did the Bull Run Run over your way a couple times. Very cool race and trails. Anything coming up? I’ll be attempting a 39 miler in Louisiana on Feb. 3rd. Cheers!