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Holding-Awaiting Consumer Prices

Well today we will have the consumer price index released -markets are holding flattish awaiting the news. The forecast is for a very tame number – up .1% from last month and 3.3% from year ago. The core rate is forecast firmer at up .3% and 4.1% year over year. Markets are really focused on these numbers – with earnings season over folks have to fixate on something.

The 10 year treasury is trading at 4.62% right now down 1 basis point from yesterday. I could easily see this moving 10 basis points higher or lower, but more likely we will see a minor range of plus and minus 5 basis points. We’ll see if markets are reasonable/logical.

Yesterday was actually a pretty quiet day–unless you were invested in B Riley (RILY) securities (common, preferred or baby bonds) which took quite a ride. Of course their related securities also took rides–Babcock and Wilcox (BW) common shares closed at 99 cents – their preferred is trading around $11 with the baby bonds at $15 and $18. Whether there is an fraud occurring anywhere (Franchise Group etc) isn’t known, but investors haven’t wanted to wait around. What I know for sure is Bryant Riley participates in more marginal deals than anyone I have seen in recent years–although back in the 70’s and 80’s we had some really sketchy investing banking. As I mentioned I won’t be involved in these securities, although there could be some real bargain to be had–but who knows for sure.

Yesterday was slightly green for my accounts – very slightly. I have a bit of dry powder available and still looking to buy (whether it is a nibble or somthing bigger isn’t know). My CD ladder missed a rung in November so I will have just my current dry powder stores for a few weeks then I will have CDs maturing monthly for at least the next 6 months. In a perfect world my CD money would all be deployed elsewhere – but it isn’t a perfect world so we simply have to play it week to week and month to month. My personal thoughts are for drifting lower interest rates for the next year, but then rates move higher as the treasury floods the market with debt. I am wrong at least 50% of the time on economic forecasts so one has to be flexible.

Well we are 40 minutes from data time – let’s see if markets remain calm or if silliness prevails. I may determine whether to buy today – we’ll see.

5 thoughts on “Holding-Awaiting Consumer Prices”

  1. Does anyone follow which F/F issues used yesterday or today’s SOFR to reset their next quarterly coupon?

      1. Thanks, Tim – I readily admit that I tend to forget to check your database info so thanks for the reminder… FWIW I did notice you’ve got ATCO-I listed that was already called and C-K which will be called tomorrow….
        Interesting that 3 month SOFR is higher today than yesterday due to it being published prior to the CPI info… Not good for the F/F issue that reset based on today’s (or yesterday’s) SOFR but good for those looking to lock in another juicy 3 months of floating rate returns… 3 month SOFR today = 5.39821%

    1. 2WR
      I try to follow the resets. I have BAC-E, ET-C, and ET-D as having yesterday as the SOFR for the next reset. Do not accept this as a basis for any action without DYODD.

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