While it was a tough day on Wednesday for common share prices income issues hung right in there–essentially flat on the day.
With the producer price index (PPI) coming in favorable to forecasts and retail sales coming in soft the 10 year treasury tumbled 16 basis points!!! The closing yield of 3.375% is the lowest close since 9/12/2022–about 4 months ago.
Right now the equity futures are off about 1% —while interest rates are essentially flat at 3.38%. Things can change in an instant of course so one never knows and in fact as I type this jobless claims just came in at 190,000–way under the 215,000 forecast– and interest rates are popping some and are at 3.41%. Once again employment numbers remain stronger than expected–so this once again reaffirms needs for higher interest rates (at least in the eyes of the Fed).
So here we go after 8 straight days of income issue gains–yesterday was flattish. I will be out of the office again today, but back in tomorrow. I plan to closely review our holdings tomorrow and see if there is a need for some tweaking after recent gains–I remain nearly fully invested and plan to continue to remain fully invested.
Got more CSHCN today at $24.90. I’m still pissed about missing OZKAP last month. Not much quality 7%+ QDI left.
Anyone watching something similar?
CHSCN?
Sorry, correct. Late night tpyo.
Back at the tax free income window to fill my income ladder, as I purchased at Vanguard:
CUSIP 396694R78 Greenville, Texas Combination Tax Rev Ctfs Oblig 3.375% due 2/15/2044 Callable 02/28@100 Sinking Fund 02/40@100 – AGMC insured paid $89.968 to YTW/YTM 4.09% Double barreled type General Obligation and Revenue for Water and Sewer rated A1/AA underlying S&P AA- Stable. Smile and stay frosty my friends, I am Azure
Heck, I have been selectively buying as ( senior loans, emerging market debt) we are closer to the end of rates hikes as opposed to issuing more.
Way too much $$$ in cash and $ market funds. Gotta come out some day.
Did a good amt of selling yesterday bringing cash from 7.2% to 20.5% of my 3 a/c (taxable, ROTH, TradIRA.) I was at 45% in June, down to near 0 in Dec., locked in a lot of gains even on ones I had hoped would be keepers due to great buy prices I got. FED sounds still hawkish and labor market is really strong. Building cash for new opportunities I expect to arise.
Sold CADE-A, 1/2 CIO-A, 1/3 HPP-C got at 13 sold at 15, OZKAP, UZD I had at 16.30 for 20. Have a stink bid in on a CHS issue but nothing else looks good at the moment. I get tightening of risk, Charles, makes sense to me. Bea
OZKAP. That’s the one I forgot to pickup last month. Up to 17.80 today…. maybe I’ll see if markets pull back and re-evaluate. It has such a low rate that it won’t be called for centuries… You know what, I’m just gonna grab a handful so I dont forge, and I’ll pick up more if it drops.
I’ve sold nearly all my late 2022 purchases which brought me to zero cash like you. I’ve kept EP-C and D, CR-J and K, BC-B and a smidgeon of MPW. Instead of parking all the proceeds in cash I’ve added to some price-stable / short-maturity issues – AIC, NEWTL, TRINL, RMPL-A and TANNL.
I started buying individual bonds last August to the point where they are now 30% of port. Funny, a couple months ago they were a sea of red and now mostly a sea of green. Not much current opportunity with bonds as they’re way off their lows.
Wish I would have bought more TY-R @ 44.63!
Indexes been down last 2 days and late and after market selling , but preferreds up. Another inverse curve lol.
Mixed messages, PPI decent but unemployment not up as much as expected for Dec. yet we all know 10’s of thousands of layoff’s this month in tech and banking. Still expecting a small increase by the feds. Even REITS moved up. I cancelled my sale of 1/2 my EQC-D I can afford to wait if it drops.
Locked in profits by selling UZE and UZD even though we are still a ways from x-dividend day. The charts show people chasing these two up to those dates then prices falling off during the last 6 months. If I want them later hopefully I can buy them back. Just had too much as I still hold GJH
Also, after collecting the dividend I sold LBRDP at a profit.
So many other preferred, trusts and BB have run up in price I am tempted to take profits, but these 3 were my weakest as far as quality holdings go.
I dumped my weaker quality holdings for tax loss harvesting last month. They have rebounded over the last few weeks, however, that money got rolled over into IG issues 5 1/2-6%. Low coupon issues so hopefully not called for a long time.
I’m out of dry powder staying fully invested and deals on IG issues are slowly shrinking. The fed appears to be heading to 5%.
So 5 1/2 – 5 3/4% may be the new floor for IG issues. Not bad IMO as a buy and hold type of guy.
I grudgingly sold my CTBB shares yesterday. I am mostly looking for income, but I was up quite a bit and they are my weakest holding. Ex div is the end of February, may buy them back if lower. I was thinking of doing the same with SCE-L, up a lot in it, but I couldn’t pull the trigger on that one, not as sure I could find something to replace it quality wise. Looking at it this morning it is hanging in there so far. I will probably stand pat for now, only issues that are in the red slightly are ones that have maturity dates less than 3 years so not worried there.
SCE-L may still have room to run given the current yield.
Once the Fed pauses I think it may have another leg up.
Given all the rain in CA, heartbreaking flooding, wildfires and utility liability may not be too much of a concern this year.
But even if it runs to $22, sell by summer and buy what that will give you the same yield as you get today?
I’m reminded of Othello by Shakespeare. Othello had the strategy to act nuts so everyone would dismiss him so he could watch them make their own mistakes.
So, are we acting nuts or is it this market?
PN, “Given all the rain in CA…wildfires…liability may not be too much of a concern this year”
Counter-intuitively, all those January rains grow the fuel that previously burned in Aug/Sep, and now burns near year-round. It’ll all be quite crispy by June.
Alpha, dont go around needlessly scaring the children. Especially me being I own all 3 CA major ute preferreds, ha. Sold the SCE-L a smidge too early last week, but got it back basically riding 2 PCG preferreds now up into exD country soon. I doubt I still own PCG come browning season!
Grid, Keep extracting that CA ex-D loot! For fun bought a Duke bond; enough to cover my Duke elecric bill. Not selling anything right now as averse to reinvestment risk. Now waiting for the next “event.”
That is still possible ………..
I concede that I am making an assumption that the crazy weather patterns may not disappear as fast as they appeared.
I hope it helps agriculture for sure. I do like a CA red wine and the strawberries. I have nothing against Mexico but their strawberries are dry and not as sweet. At least not the ones we get here in the north east.
PN, I remember as a kid walking the forest in deep northeast and randomly finding rasberry patches. Those were the days!
PN, won the door prize for the Christmas Bazaar for the AV ladies auxiliary last month. I think it was 20 bottles of wine and champagne in the basket . Robert Young, Silver oak , Hannah etc. last me the rest of the year.
Me worried about wild fires ? twice smoked out, definitely gun shy.
Charles, Congrats on the door prize! …though if we were neighbors we might need a mid-year re-charge. Re the fires we were smoked out three times down south in Westlake Village. The house immediately next door burnt 100% down to the foundation. It was always real stars and stripes kind of event with water choppers (Hueys), planes/jets at 500 feet, though in the end, enough is enough. I know you’re up north, we’ve relo’d to Lake Norman, NC. No fires but got gosh darn cold in December so in HA til March 1! Watched the sun go down last night while nursing a Conundrum.
Impressive watching the 747 super tanker fly by right overhead. Watching the red flames at night was unsettling. First time they stationed the National guard in town and told everyone if they left they couldn’t come back. I was packed and ready to go. Left at 3:00 am We moved the sheep to the county fairgrounds with the help of some horse ranchers and their trailer. Every thing was here when we got back. Second time packed and ready to go but never left.
California on my mind tonight is the dinner I had with David Crosby in North Beach. Started as a dinner and ended up being a party with everybody in the restaurant. Didn’t consume any CA red wine but about a barrel or two of Italian red . . .RIP David.
Tex, That must have been a fabulous night. With that kind of connection, today’s news must have weighed more heavily on you than most.
Seems we’re losing too many lately…
Might be just as well Bill, I know parent co. suspended its dividend and that supports the CTBB dividend but these are long dated notes. I’ll bet you will be able to buy them back in the next few months as LUMN doesn’t seem to a plan to stabilize let alone grow the business. Next earnings report coming up in a few weeks.