We have seen some wild swings in markets this week–yesterday when a stronger than anticipated GDP was released equities moved fairly sharply higher before giving up the entire gain.
Today we have maybe the most watched number of July being released in 15 minutes – the personal consumption expenditures (PCE) and with it a read on the latest inflation data. Yesterday the GDP number at 2.8% was not friendly toward a Fed funds rate cut in September, but we have lots of different data points being being released in the next 60 days–inflation, employment and GDP so one can’t reliably predict what will happen.
Right now equities are up sharply–in particular NASDAQ which is up over 1%–Party On. Actually this can change in an instant so we don’t take this move to mean we are going to melt higher. The 10 year treasury is at 4.24% right now–not much movement all week–I guess waiting for this PCE number.
I have done little this week investment wise although I added some CDs yesterday, although rates were down on the 3 month issue to the 5.15% to 5.20% area. The portfolios have held up decently this week as term preferreds and short dated maturity baby bonds held up very well–of course perpetual preferreds took a little bit of a hit.
While I haven’t done much this week–I am on the hunt and will buy something soon and am targeting 70% in the preferred/baby bond portion of holdings eventually–over time.
Well let’s get on to the BIG numbers!!
Morgan Stanley 6.625% Depositary Shares Non-Cumulative Preferred Stock, Series Q
Ticker Symbol: MSPQV
CUSIP: 61762V838
Its already trading at $25.80 so obviously everybody knows rates will be coming down. I was semi-interested at par but not at this price. I can still get a smidge over 5% in my MM.
I hotlisted those Affiliated Managers bbs MGR MGRE that rocks2stocks posted on yest. I know Tim has the MGR, forgot about these, thanx, may use for ballast to juice cash since I dumped the EQC D pfds. Bea
PCE reported at 2.5% year over year. The Fed should reduce rates in July. The rates would still be restrictive at 5.0% to 5.25%.
But more important to investors on this board. Will the Fed signal a rate cut in September? I would bet they would. What will the reaction be to this signal? I would bet the money markets and bank CDs will reduce their rates immediately even before the Fed does the rate cuts. The infamous, “baked into the numbers”. Naturally, I could be wrong. But if you want to lock-in, you may want to consider that before Wednesday’s announcement.
I am not locking in. I want the dry powder.