Well Bank of America (BAC) is out with earnings this morning and as expected their numbers were very good–of course I am most interested in the small banks instead of the mega banks.The community/regional banks will pay me 2% more on their preferred issues and I think the risk/reward proposition is pretty good in the 7.5% to 8% current yields. I am adding a bit to some of my current regional/community bank holdings this morning–my current holdings are small and my adds very modest. My laundry list of holdings is here. All the banks are listed here.
Yesterday was a quiet, but positive day in equities–perfect for me. My portfolios were green, but flat is ok with me – nice interest and dividend payments coming in multiple times a month. I really construct holdings for the best yield consistent with my risk tolerance level – capital gains are just ‘gravy’.
While it hasn’t gotten huge amounts of press in the last week interest rates have moved sharply higher–the 10 year at 3.59% is 30 basis points above 10 days ago. The 2 year treasury note has really zoomed higher–now at 4.18% almost 40 basis points higher. Of course these rates pale compared to a couple months ago so everything is relative–it has only been 7 weeks since the 2 year was at 5%.
Yesterday we had little important economic news. Empire State Manufacturing came in very strong relative to expectations, while home builder confidence came in as expected and slightly up from last month. Today we had housing starts and building permit data being released–housing starts about on target and permits somewhat soft. Likely these numbers are not market movers.
Markets are somewhat green this morning, let’s see if they hold their gains.