Again yesterday we had interest rates shoot higher – this time by 11 basis points (on the 10 year treasury) and these spikes are getting kind of painful. After having nice gains in October and November income issues have seen those gains evaporate–oh well nothing I can do about these movements except work my plan. Of course December is a big dividend and interest month so we can take some solace in that fact.
Yesterday income issues ended down by 9 cents a share–which was off the low of the day by a penny or two. The sp500 fell by just shy of 1/2% – volume was around 25% lower than the norm as we move toward another holiday weekend. Futures, which probably mean little, are up by 1/3% at this moment. The 10 year treasury is at 3.81% which is off 5 basis points from yesterday and with only pending home sales on the economic calendar maybe we will see drifting rates for the time being.
For those looking for a stable 5.875-6.5% a review of the 5.875% RiverNorth Capital and Income Fund term preferred (RMPL-P), which matures in October 2024, should be on your list. Additionally the XAI Octagon 6.5% term preferred (XFLT-A) has traded very steady. Each of these issues has traded right near $25 because of the short date maturity. Both of these issues are closed end funds so they are required to maintain a 200% asset coverage on senior securities. I am overweight in both of these issues.