The 10 year treasury is trading at 4.15% this morning after movements higher all week long–slow down!! As we all know preferreds and baby bonds will tolerate some level of higher interest rates, but they react best when the move is slow–a basis point or two in a day–maybe 5 basis points in a week. Movements of 10 basis points in a day can create investor pain. My accounts moved a little lower this week – July was an excellent month, but August is not starting out too well.
Today we have 2 large treasury bills being auctioned – 70 billion of 4 week and 80 billion of 8 week bills – we’ll see how those coming off.
Equity markets are a bit soft once again today and we’ll see if this is a turnaround Thursday – or is there more downside to come. Certainly equity investors have new reasons to sell – if an excuse is needed we have them. Potentially we will see some drifting today as we await the employment numbers. ADP showed hot employment for July – but this seemingly is meaningless as we saw last month when ADP showed hot numbers and the federal government showed softening numbers.
Did you see the excellent numbers posted by insurance company SiriusPoint (SPNT). Absolutely stellar. SPNT has a 8% cumulative preferred outstanding which almost certainly will be called in 2026 as it is a fixed rate reset with a very punitive spread of about 7.3% to be added to the 5 year treasury on 2/26/2026. I am pondering putting this on my watch list for the current yield of just over 8%. It is trading at $24.89–don’t want to pay over $25.